The Illinois Commerce Commission approved a new process for Illinois utility companies Jan. 24 to purchase electricity amid protests from consumer advocacy groups and state government officials.

The commission’s decision will mark the end of 10 years of a heavily regulated utility market in Illinois and end a rate freeze that has been in effect since 1997. While both advocates and dissenters of the move to a new purchasing system disagree on whether or not the new procurement process should move forward, both agree that it will ultimately mean a rise in electric bills for consumers.

“Our argument is that Exelon is pushing for a series of rate hikes that would raise customer bills by 39 percent,” said Jim Chilsen, spokesperson for the Citizens Utility Board, a non-profit organization that represents interests of residential utility customers.

Chilsen said that while Commonwealth Edison will not be making major profits from the auction, their parent company Exelon would.

The ICC-approved procurement process will use a reverse auction that will allow energy suppliers to bid lower prices in rounds of bidding until the needed amount of electricity is provided to the customers. The new rates based on this system would take place starting Jan. 1, 2007.

ComEd spokeswoman Judy Rader puts the total increase on consumers’ bills at a lower 15 to 20 percent.

“We can’t really predict what the auction results will be, because that’s based on market prices,” Rader said. “We have proposed a customer safety net that would limit customer rate increases to single digits in any single year for three years. That would keep rates at or below 1995 levels for 2009.”

In 1997, the Illinois legislature passed a law that reduced the rates customers were paying by 20 percent and implemented a rate freeze, which has now lasted nearly a decade.

“We did an independent analysis that shows Exelon … is the most successful and the most profitable energy company in the United States, and that’s been under the current rate freeze,” Chilsen said.

The Citizens Utility Board has pushed for the rate freeze to be extended and has found support in the state legislature with a bill sponsored by Rep. Lisa M. Dugan (D-79th) that would freeze electric utility rates for another two years. Since Feb. 24, the bill has been in the rules committee.

“Absolutely nobody likes to see any kind of cost increase in anything, whether it’s our property taxes or the gallon of milk in the store,” said Natalie Hemmer, spokeswoman for Ameren. “But I think there are very few things that you can look at that have not had an increase over the last 10 to 25 years.”

ComEd and Ameren are currently locked into energy distribution contracts that expire at the end of 2006, and state law requires the frozen rates that regulate how much suppliers charge consumers for electricity to be lifted.

“If Illinois is to meet its electric energy needs and consumers are to actually have power when they flip the switch, these companies . will have to buy energy from someone,” said Avis LaVelle, media liaison for Consumers Organized for Reliable Electricity, a coalition that supports the deregulation of the electricity industry.

LaVelle said attempts to keep the rates frozen are shortsighted.

“You can try to suppress rates and hold consumers to pay the same rates for energy, but the electric energy distributors . are not able to buy energy for what they bought it for 10 years ago,” LaVelle said. “What you’re essentially doing to the companies is forcing them to buy at a high price, but requiring them to sell electric energy for less than what they bought it for.”