NEWS RELEASE
From: Corporate Communications [ComEd Logo]
One First National Plaza
P.O. Box 767
Chicago, IL 60690-0767
Contact: Keith Bromery
(312) 394-3003 FOR IMMEDIATE RELEASE
Thursday, May 27, 1999
CONSUMERS, ILLINOIS INDUSTRY, THE ENVIRONMENT ALL WIN IN NEW
AGREEMENT
NEW LEGISLATIVE ACCORD ALSO ALLOWS UNICOM TO GROW AND
COMPETE IN RESTRUCTURED INDUSTRY
SPRINGFIELD, IL. -The Illinois General Assembly made
changes to the 1997 Restructuring Law today providing a new
set of benefits for consumers, Illinois industry and the
environment. The amendment also raises the so-called
"earnings cap," which affects the amount of earnings a
utility is entitled to retain.
"Today's agreement will provide the State of Illinois
with a one time contribution of $250 million for statewide
environmental initiatives," said Frank Clark, Senior Vice
President, Corporate and Governmental Affairs, ComEd. "The
agreement enhances reliability, accelerates savings for
residential customers, and provides faster access to
customer choice for Illinois industrial manufacturers." The
measure does not become law until signed by Governor Ryan.
The legislation includes the following provisions:
- EARLIER RATE DECREASE FOR RESIDENTIAL CUSTOMERS
As a result of today's agreement, residential customers will
receive a 5% base rate reduction in October 2001, seven
months earlier than originally scheduled.
- FASTER TIMETABLE FOR SUPPLIER CHOICE
Industrial manufacturers using less than 4 megawatts of
electricity will have access to customer choice as early as
June 2000, which is six months earlier than originally
scheduled.
- ADDITIONAL RELIABILITY COMMITMENTS
Part of the measure is ComEd's commitment to spend at least
$2 billion through 2004 on maintenance and enhancements to
its transmission and distribution system. These
improvements are in addition to the reliability projects
slated for the City of Chicago.
- NEW ENVIRONMENTAL FUND
The measure also calls for ComEd to allocate $250 million to
a special fund that will be used to support environmental
initiatives, energy efficiency programs, renewable energy
projects and grants to preserve natural habitats and
wildlife. Of this amount, $25 million will be earmarked to
fund clean coal technology and research with the potential
for another $25 million allocation for this purpose in the
future. The remainder will be used to create an irrevocable
environmental trust and foundation, which will be
administered by six trustees. The General Assembly will
appoint four of the trustees; the Governor will appoint one;
and ComEd will appoint an environmental expert. ComEd will
also appoint one non-voting financial expert.
- COGENERATION OPTIONS ENHANCED
The new legislation also promotes increased co-generation
options available to commercial and industrial power users.
The legislation will remove size limitations on cogeneration
facilities not subject to transition charges as long as
minimum standards are met, including requirements that the
plants meet federal efficiency standards and sell excess
energy into the wholesale market.
- LABOR PROTECTIONS
The measure also preserves labor protections enacted by the
Restructuring Law and provides for approximately $250
million in income, replacement and transfer taxes to be paid
to Illinois state government as a result of the sale of
ComEd's fossil electric generating stations. The sale is
expected to be completed by December 1999.
- EARNINGS CAP
When the legislature created the earnings cap as part of the
1997 Restructuring Law, it partially tied the amount
utilities were allowed to earn to the yield on 30-year U.S.
Treasury Bonds. Earnings in excess of the cap must be
shared 50/50 with customers. Treasury bond rates averaged
around 7% when the legislature debated the Restructuring
Law, but fell to near record lows of less than 5% a year
later. The yield on treasury bonds has averaged
approximately 5.5% in 1999. The new provision maintains a
cap, but raises it by two percentage points beginning in the
year 2000. The increase in the earnings cap will allow
ComEd to meet or exceed its earnings goal of $3.00 per share
in 2000 and provide more flexibility in pursuing growth
opportunities.
"The General Assembly deserves great credit for passing this
measure," said Clark. "It provides greater benefits for all
consumers, recognizes the importance of the environment, and
sends a good signal that the state cares about the
continuing vitality of Illinois business. We can continue
to be proud of the ground that Illinois is establishing in
leading restructuring of the electric industry."
For a discussion of the factors affecting the potential
for actual results to differ from the forward looking
statements made above, please see Unicom's Current Report of
Form 8-K dated May 27, 1999.
Incorporated in 1994 and based in Chicago, Unicom
Corporation (NYSE:UCM) is a public company dedicated to
meeting the energy needs of residential, commercial,
industrial and wholesale customers. With nearly 16,000
employees and $7 billion in revenues, Unicom Corporation is
the parent holding company to Commonwealth Edison Company
(ComEd), its
principal subsidiary, and Unicom Enterprises, Inc. (UEI),
the umbrella organization of its unregulated subsidiaries.
Engaged principally in the production , purchase,
transmission, distribution and sale of electricity to retail
and wholesale customers, ComEd provides service to more than
3.4 million customers across Northern Illinois, or 70
percent of the state's population.