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Electricity Rates Rising in Illinois

Illinois residents have seen a jump in electricity rates recently. NewsHour correspondent Elizabeth Brackett looks at the debate over deregulation and freezing rates in Illnois.

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  • JIM LEHRER:

    Now, rising electricity rates. NewsHour correspondent Elizabeth Brackett of WTTW-Chicago reports.

  • ELIZABETH BRACKETT, NewsHour Correspondent:

    Sherrill Lausmann of Decatur, Illinois, was shocked by the size of her electricity bill last January. That's when the Illinois legislature's freeze on energy prices was lifted. Lausmann's bill had doubled to $110 a month. It meant she had to cut back on other expenses like groceries, and she had to use electricity sparingly.

  • SHERRILL LAUSMANN, Illinois Resident:

    I just didn't turn the heat on when there was sun coming through the windows. Now, there were some days, of course, when I had to turn it on, but I only turned it on when I had to.

  • ELIZABETH BRACKETT:

    The freeze had been put on nine years ago to protect customers against sharp rate hikes when the industry was first deregulated. But now that the freeze has been lifted, rates have risen 30 percent to 60 percent to even 100 percent.

    It's affecting small businesses, as well. It takes a lot of electricity to maintain the ice at the Heartland Ice Arena in suburban Chicago. Owner Russ Naumenko was not prepared when his bill soared.

  • RUSS NAUMENKO, Illinois Businessman:

    I couldn't believe it. It was unbelievable. I mean, it was a big hit. I mean, it's $3,000 more than I thought it was going to be. It's tough.

  • ELIZABETH BRACKETT:

    When legislators deregulated electricity in 1997, they wanted to break the monopoly hold on the sale of power that local utilities had. They thought if they split off the producers of power from the suppliers of power and got rid of some of the government regulations, that a lot of new suppliers would want to jump into the market, that competition would lower the price of electricity.

    But new companies didn't come into Illinois, and consumer advocate David Kolata says nearly all the states that have deregulated have run into the same problem.

  • DAVID KOLATA, Citizens Utility Board:

    The problem is, is that the law presupposes that it's going to be competition that protects consumers, and competition simply hasn't developed. So that, if you go forward, what are you doing? You're basically ending up with a deregulated monopoly, and that's the worst of all possible worlds.

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