Should transmission owners get paid extra for distance and voltage?
While the Midwest now appears set...
Customers Come First
Bruce Radford's May 15 "Frontlines" (p. 4) commentary on the Sears Tower/QST cogeneration project misses the point. I would like to correct his misconceptions and clarify the issues by looking at them from a marketplace viewpoint rather than a utility-based viewpoint.
First of all, the Sears Tower's savings are more than an "allegation." QST's proposed cogeneration facility for the Sears Tower will reduce the cost of electric power supply to the tower by about $2 million per year compared to what it costs under ComEd's current rates.
The outstanding issue is a legal one, i.e., whether or not the building owner has the right to install a facility and compel ComEd to allow the proper interconnections to their transmission and distribution network. We believe that the Illinois Commerce Commission will uphold our position that ComEd has an obligation to allow this interconnection so that the tower can enjoy the economic benefits that are available to them.
A second misconception relates to ComEd's comments about QST "locking in" tenants by "replacing one monopoly with another" when there is "deregulation legislation under way in the [Illinois] Capitol right now." QST's proposal by no means locks in the tenants. In a very real way, the tenants will have the best of both worlds. They will be able to choose between the low-cost, self-generated power alternative offered by their landlord, the Sears Tower, or power supplied by ComEd at the current rates or - should consumer energy choice become available - competitively priced electricity offered by an energy provider of the tenant's choice. However, if the current deregulation legislation backed by ComEd is successful in Illinois, self-generation will likely offer much greater savings than wheeled power due to excessive stranded cost payments to ComEd.
What a lot of people, including Mr. Radford, seem to miss when considering the Sears Tower/QST project is that this is a customer-defined, customer-desired solution provided by QST. This type of business transaction and relationship is "business as usual" in the competitive marketplace. In no way was the Sears Tower compelled to accept our proposal, except as we were able to provide them with a competitive service at a competitive price. In no way does QST's relationship with the Sears Tower resemble Sears' monopolistic relationship with ComEd. They are free to deal with us in a variety of ways and they, or we, could have walked away from the table at any time. Unfortunately, the Sears Tower can't walk away from ComEd, like they can with practically any other supplier of products and services who is not competitive.
No business, particularly in today's competitive climate, can continue to put its economic interests way ahead of its customers. That is what has happened in the utility industry and that is what is driving utility deregulation. It is unfortunate that utilities such as ComEd see no alternative but to continue to try to deny their customers access to cheaper electricity (which is clearly available to them but for the regulatory barriers). But their position clearly highlights how ComEd and others take anti-competitive actions to