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HomeMy WebLinkAboutMinutes 1990DRAFT -NOT APPROVED Minutes of the COMMONWEALTH EDISON TASK FORCE Meeting of January 4, 1990 Members Present: Ann Dienner, William Hartgering, David Kraft, Charles Lippitz, Norman Raedle, Edmund Pabst, Jan Schakowsky, James Suhr Members Absent: Phil Lewis, Ned Lauterbach, Kenneth WhiCney Others Present: Raymond O'Leary, Jacob Arnov Staff Present: Judith A. Aiello Presiding Official; James Suhr, Acting Chair Summary of Action: Tha meeting was called to order at 7:36 p.m. by Acting Chair James Suhr. The minutes of December 7, 1989, were approved with the following modifications: (1) The correct spelling of Mr. Raedle's name; (2) The power outage lasted for three hours rather than twelve; (3) Mr. Hartgering's involvement will be in a large case with Commonwealth Edison and he will be directly involved; (4) On page 2, the last paragraph, the word community should be communities. Mr. Suhr acknowledged various communications which were distributed. Also members of the Task Force presented'other articles which will be distributed to the Committee. • Mr. Suhr then asked Mr. Kraft to introduce the speaker for the evening. Mr. Kraft introduced Ms. Ann Hallett, who is the Executive Director of the Wieboldt Foundation and the former Co - Chairman of the City of Chicago's Energy Task Force. Ms. Hallett joined the Task Force and presented a brief overview of Chicago's process and stated that the report presented by the Task Force was prepared by the Task Force rather than by staff members from the City of Chicago. Ms. Hallett reviewed the goals which the Task Force had recommended that the City of Chicago should adopt to guide its electric energy future. They included: (1) low cost for energy service; (2) re: liability; (3) competition; (4) energy efficiency; and (5) economic development. She highlighted some general findings of the report which included that the Chicago area ki.s among the highest cost of electricity in the country and that the high electric rates have had an adverse affect on manufacturing industries in the service area and contributed to the loss of jobs. Cam Ed Minutes -2- Menting of January 4, 1990 , The Task Force recommended that the City of Chicago take advantage of the provision in their franchise agreement and give notice to Commonwealth Edison regarding the termination of the franchise agreement. It was so noted that the City of Chicago did follow the Task Force recommendation and did give notice that shay would be terminating their franchise agreement with Commonwealth Edison and would be considering the purchase of the system. A discussion was held regarding the language within the franchise agreement in Chicago regarding what actually could be purchased. It appears that the City of Chicago could acquire only what is. in Chicago or could acquire what would be needed to supply Chicago. The acquisition could also be at the original cost. Ms. Hallett indicated that the Task Force discussions with various investors have indicated that funds would be available to acquire the system, but she did not think the City of Chicago would actually acquire their system. In response to a question as to why the City would not purchase it if indeed significant savings could be gained, Ms. Hallett indicated that it is a very political question and that there is concern that municipalization would :entilt in the precinct captains running the service. However, it has dlways been discussed that it should be run professionally and could be run professionally. Ms. Hallett indicated that'if renewal was going to occur it was her belief that a franchise should be a short term and probably no more than five to ten yenrs with very defined goals by which the franchise could be evaluated and by which there could be significant public policy discussion regarding the level of service. She also believes that the strong issues for negotiation included the following: (1) demand side management; (2) low cost technology; (3) competition; (4) co -generation; (5) distribution systems; (b) program for low income residents for cost savings; and (7) strong cviiservation. She indicated that at this time the Mayor of Chicago has appointed a negotiating team and a working group, vnich is an advisory panel consisting of seven members of the original task force appointed by Mayor Sawyer. Mx. Robert HvIman, from Meyer, Brown and Platt, will be head of the rstgotiating team and it appears as if Mr. Helman has a good grasp of the issues and has appreciated the work of the Task Force. The Mayor's Office and the City Council will be holding public hearings in Chicago on this issue, however, she indicated that their task force has not had a lot of public comment nor has there been a lot of good press coverage. The issue of press coverage was discussed by the Task Force with Mr. Kraft presenting various examples of poor press coverage. Com Ed Minutes -3- Meeting of January k, 1990 Mr. Pabst indicated that it is his belief that until you could get the business community to support the municipalization process that it really was going to be difficult to offset the whole history of Commonwealth Edison's participation and image of a good corporate citizen. Ms. Hallett agreed and indicated that Commonwealth Edison has been a good corporate citizen. She reviewed for Evanston how the City of Chicago had had a whole public opinion campaign set forth, but that prior to its implementation the funding for the scope of work had been reduced by the City of Chicago. However,_ she stated that the Task Force members are pleased that Mayor Daley has implemented two of their recommendations. She also indicated that there had been some public opinion outreach in that there were fifteen Wards that participated in an advisory referendum and that the result was overwhelming support for some type of change. A brief discussion was held regarding the possibility of an advisory referendum in Evanston, and in addition the whole issue of a negotiating team. The issue was raised that it may be advantageous that the City of Evanston early on in the process name their negotiating team so that a good tone was set for tough negotiations so that it would not be an adversary role. Staff clarified that for all negotiations the City Manager and legal counsel are the ones who do the negotiations. Mr. Suhr raised the question with Ms. Hallett as to the cooperation that the Task Force received from Commonwealth Edison. Ms. Hallett responded that Commonwealth Edison was not very responsive and in most situations would indicate to the Task Force that running the electrical utility system is a very complex matter which requires technically trained ir.dividuals. In response to a question by Mr. Hartgering as to some examples of model cities that might be comparable to Evanston, Ms. Hallett suggested that staff contact the City of Chicago staff, either Dr. Charles Williams or Mr. Neil DeSnoo. Ms. Hallett also reviewed the various consultants that wvrked with the City of Chicago and the funding for them. She believed that the current request of $30,000 for a preliminary study could have some beneficial results for the City of Evanston. The whole issue of financing and how the City of Chicago would purchase the system was briefly discussed and it was the general consensus of Ms. Hallett that due to changes in the tax laws is would have to be privately financed, but that indications from the financial community was that there are good opportunities available for such an arrangement. There are preliminary cost estimates that it would cost about $2 billion to purchase the system that is physically located within the City of Chicago, and $6 billion for equipment and power plants that are outside the corporate limits of Chicago, such as portions of the nuclear power plants. Com Ed Minutes Meeting of January 4, 1990 - 4 - With no further questions Mr. Suhr thanked Ms. Hallett for her presentation and invited her to stay for the remainder of the meeting. The Committee then discussed the upcoming meeting of January 11th, and at this time it was anticipated that Ms. Freddi Greenberg would be in attendance to talk to the Task Force regarding the regulation system. Also discussed was the issue of a presentation by the Gas Research Institute and an attempt was made to clarify the Gas Research Institute's intent. The consensus at this point was that we must await a letter that is coming from the Gas Research Institute which will clarify their interest in meeting with the Task Force. The next item for discussion was the public opinion process. David Kraft initiated discussion by stating that he believes that the Task Force needs to initiate a public education process better known as Franchise 101, so that the community can be aware of the importance of the franchise determination. Various ideas were discussed as to how to generate interest, but it was clearly the consensus of the Task Force that this matter which is of significant importance should not be handled lightly and should have a strong component of public education. The Task Force has agreed to send a memorandum to the Mayor and informing her of the Task Force members availability and recent meetings with various groups within the community to inform them of the status of the Task Force and the recommendations to the City Council. It was the consensus of the Task Fcrce that a public education process should be proactive, responsive, objective and confined to the report and the status of the process. Mr. Kraft also believes that a introductory brochure and time line should be prepared and offered to do so for the next meeting. Discussion was held relating to the report which must be re- drafted and sent back to the Task Force. It was the consensus everyone should forward their information to staff by Friday, January 19th. Comments were then received from the audience and with no further business the meeting was adjourned at 9:45 p.m. JAA:Ir cc: Joel M. Asprooth 'OW901CXL' Assistant City Manager DRAFT - NOT APPROVED