Energy costs represent a significant portion of a condominium association budget.
In May 2006, the Illinois Commerce Commission granted rate increases to Com Ed. In granting the increases, ICC Rule 5-5/97 allowed the utility to bill common elements of a condo property at a higher commercial rate. The commission ruled, essentially, that the use of lobbies and hallways of a multistory building is commercial in nature. Before that, all portions of a condo building were charged the residential rate.
The new rates took effect Jan. 2, and many associations, particularly larger ones, experienced significant increases. While associations anticipated an electricity increase of 20 percent, bills showed increases of 70 percent or higher.
Many associations say that members and boards were not aware of the planned billing changes and contend that the entire condo building serves a residential function and, thus, should be classified as a residential electricity customer.
Associations are non-profit operations whose members pay assessments to meet common expenses. Lobbies and hallways are part of the common elements, which board members say function as the entrances to the homes of unit owners.
In response, the House Electric Utility Oversight Committee held a special hearing April 12 at the State of Illinois Building. The committee heard objections to the new rates from associations representing a range of homeowners and from AARP.
ComEd maintained these rates reflect the cost of obtaining power in the wholesale market, as well as significant changes to an old rate structure. It added that only 850 apartment and condo buildings, representing 12 percent of the customers in this category, were reclassified. But it acknowledged that these associations have seen increases of up to 70 percent.
ComEd then proposed an assistance program to limit the average increase to about 24 percent for customers using 400 kilowatts or less through May 2008. For customers with demand greater than 400 kilowatts, ComEd proposed to issue credits to limit the average increase to about 24 percent through December 2007. ComEd filed an application with the ICC on April 27 to execute those assistance plans.
Condo associations, however, want a long-term solution. Senate Bill 1592 may be that answer. It seeks to amend the Electric Service Customer Choice and Rate Relief Law of 1997 and the Public Utilities Act. The bill was passed by the Senate and is in the House.
The legislation essentially would roll back common element rates for residential condos in major metro areas to residential levels. It further would require the utility to provide the same discount rates to associations that received them on Dec. 31, 2006.
