Exelon makes promises on jobs
SPRINGFIELD – Exelon Corp. has agreed in writing to preserve certain jobs and pension benefits and improve reliability if its proposed purchase of Illinois Power is approved.
Among the company's promises are: a limit on layoffs of no more than 50 people over five years; maintenance of headquarters in Decatur and satellite centers in Danville and Kewanee; and preservation of benefits for Illinois Power workers and retirees.
It also committed to improving reliability in the frequency and duration of outages in the Illinois Power service area.
The commitments were outlined in a letter faxed Thursday morning from Exelon CEO John Rowe to Senate Minority Leader Frank Watson, R-Greenville, and Decatur Mayor Paul Osbourne, as Exelon prepares a full-court press in the General Assembly's fall veto session.
Illinois Power and Exelon, the parent company of Commonwealth Edison, are seeking speedy approval of a bill that would order the Illinois Commerce Commission to accelerate its review of their proposed merger from the usual 11 months to just six. The bill would also direct the commission to set rates for the years 2007-2010 by mid-2004.
Electricity rates were frozen by law from 1998 until 2007, and the Illinois Commerce Commission would not normally begin to set those postfreeze rates until early 2006.
The legislation does not, however, indicate how the ICC should rule on either the acquisition of Illinois Power or the rate case. It would only affect the timing of those decisions.
On Wednesday, the presidents of ComEd and Illinois Power released a draft of the legislation and said its passage during the six-day November veto session was "critical" to the proposed merger.
Watson said he had yet to read the exact wording in the draft legislation but said he thought the companies' request for accelerated action by the Illinois Commerce Commission was "not unreasonable."
He said he hoped that something could be worked out to help the proposed sale of Illinois Power move forward.
"Obviously, I think we all would prefer Illinois Power to stay as we knew it, and that's not going to happen," Watson said.
Illinois Power officials told him there would be some "serious changes" at the company if the proposed sale falls through, and Watson said he took that to mean negative changes, including severe job loss.
Watson, whose district includes Decatur, said his main concern is jobs and his first priority is Decatur.
The "memorandum of understanding" Exelon sent him Thursday appears to address some of those concerns by making commitments as to what the corporation will do if the acquisition of Illinois Power is completed.
Among those commitments is a promise to limit work force reductions to no more than 50 people for five years. That number did not include any jobs lost through attrition or "voluntary separation" programs, the memo said.
After the deal is finalized, Illinois Power employees and annuitants would either remain in their current Illinois Power benefit plans or be moved into comparable Exelon plans, Rowe wrote in the memo.
He also committed in the memo to structuring Illinois Power as a separate subsidiary within Exelon Corp. for at least five years, and maintaining the headquarters of that subsidiary in Decatur for at least five years.
"The level of IP's officers and management located within Decatur will be no less than what would be consistent with Exelon's other regulated energy delivery businesses at their principal business location taking into account the relative size of the enterprise," the memo said.
It also promised that Illinois Power would continue to provide service from its operating centers and its satellite centers in Danville and Kewanee, and that Larry Altenbaumer would remain president of Illinois Power for at least two years after the merger is completed.
Other commitments in the memo include a promise to make the necessary infrastructure investments to improve reliability in the Illinois Power service area as measured by the frequency and duration of outages, and to continue charitable contributions and support of community programs at a level no less than the traditional support provided by Illinois Power.
A hearing on the proposed legislation is set for 10 a.m. Tuesday at the State Capitol in Springfield, which will provide a venue to air any concerns that people might have.
Watson said he was hesitant to gauge legislative support for the proposal until after the hearing.
You can reach Kate Clements at (217) 782-2486 or via e-mail at email@example.com.