Commonwealth Edison Company (“ComEd”),  Illinois’ largest electric utility provider, finds itself mired in lawsuits after federal prosecutors filed criminal charges against the Company earlier this summer.

In July, federal prosecutors entered into a deferred prosecution agreement (“DPA”) with ComEd that implicated a range of actors—from ComEd executives to long-time Illinois House Speaker Michael Madigan—in a years-long bribery scheme.[1] Federal prosecutors, state regulators, and ratepayers seek to hold ComEd accountable for its conduct.

The Deferred Prosecution Agreement

In the context of corporate criminal liability, deferred prosecution agreements are essentially a form of “corporate probation,” whereby federal prosecutors file criminal charges against a corporation, but with the explicit agreement that those charges will be dismissed so long as the corporation fulfills its obligations under the DPA.[2]

The United States Attorney for the Northern District of Illinois entered into a DPA with ComEd on July 17, 2020.[3] Under the terms of the DPA, ComEd “admits, accepts, and acknowledges” responsibility for the bribery charges brought by the government.[4] The DPA is effective for three years, during which time ComEd agreed to pay a $200 million fine and enhance its corporate compliance program.[5] Specifically, ComEd agreed to ensure that that those individuals implicated in the bribery charges are no longer associated with the Company and to create a new position within ComEd—Executive Vice President for Compliance and Audit—to oversee the Company’s remediation efforts.[6]

Oversight from State Regulators

As an electric distribution subsidiary of its parent company, Exelon Corporation, ComEd is subject to regulation and oversight by the Illinois Commerce Commission (“ICC”). In the wake of the DPA, ICC commissioners questioned ComEd’s top executives, including CEO Joe Dominguez, on the terms of the agreement and potential effects the charges may have on ComEd’s business and ratepayers.[7]

During the ICC’s regular open meeting on July 29, Dominguez faced pointed questions from regulators, but maintained that no ratepayer funds were involved in any part of the bribery allegations.[8] Dominguez also affirmed that ratepayers will not be responsible for paying the $200 million fine; rather, Exelon’s shareholders will bear the criminal penalty.[9] The ICC has not opened a formal independent investigation into the bribery charges, though ICC commissioners  said they expect “continuous and ongoing reporting to the ICC regarding ComEd’s practices.”[10]

ComEd Customers Seek Restitution

In addition to pressure from both the federal government and state regulators, ComEd’s commercial and residential customers filed lawsuits against the Company. In July, residential customers filed two class action lawsuits, one in Cook County, and one in the Northern District of Illinois alleging that their electricity rates increased after ComEd allegedly engaged in bribery to ensure the passage of the Energy Infrastructure Modernization Act (“EIMA”) and the Future Energy Jobs Act (“FEJA”).[11]

Some commercial customers filed a separate suit in August claiming  they experienced higher utility costs and diminished property values after EIMA and FEJA were signed into law.[12] The commercial customers allege that to ensure the legislation was approved, ComEd engaged in a “criminal enterprise in violation of the Racketeer Influenced and Corrupt Organizations Act” and also violated the Illinois Consumer Fraud and Deceptive Business Practices Act.[13]

[1] Tony Arnold & Dave McKinney, ComEd Charged With Bribery For Steering Jobs, Other Benefits For Speaker Michael Madigan. Speaker Denies The Feds’ Claims, WBEZ (July 17, 2020), https://www.wbez.org/stories/comed-avoids-prosecution-in-sprawling-corruption-probe-over-its-springfield-lobbying-activities/67133f96-6dc0-4e62-81cf-a9ebc6edad9c.

[2] Christopher A. Wray & Robert K. Hur, The State of Federal Prosecution: Corporate Criminal Prosecution in a Post-Enron World: The Thompson Memo in Theory and Practice, 43 Am. Crim. L. Rev. 1095, 1104 (2006).

[3] Deferred Prosecution Agreement, United States v. Commonwealth Edison Co. (July 17, 2020), https://www.justice.gov/usao-ndil/press-release/file/1295241/download.

[4] Id. at 1.

[5] Id. at 7, 9.

[6] Id. at 9.

[7] Iulia Gheorghiu, ComEd CEO says no ratepayer funds involved in alleged bribery, misconduct, Utility Dive (July 30, 2020), https://www.utilitydive.com/news/comed-ceo-says-no-ratepayer-funds-involved-in-alleged-bribery-misconduct/582590/.

[8] Press Release, Illinois Commerce Commission, ICC Questions Top ComEd Execs on Ethics Reform & Deferred Prosecution Agreement (July 31, 2020), https://www.icc.illinois.gov/downloads/public/news/ICC%20Questions%20Top%20ComEd%20Execs%20in%20Open%20Session.pdf.

[9] Id.

[10] Id.

[11] Celeste Bott, Customers Sue ComEd In Wake Of Bribery Scheme Settlement, Law360 (July 28, 2020), https://www-law360-com.kentlaw-iit.idm.oclc.org/consumerprotection/articles/1296200/customers-sue-comed-in-wake-of-bribery-scheme-settlement.

[12] Celeste Bott, Commercial Customers Say ComEd’s Bribery Violated RICO, Law360 (Aug. 25, 2020), https://www-law360-com.kentlaw-iit.idm.oclc.org/articles/1304067/commercial-customers-say-comed-s-bribery-violated-rico.

[13] Id.