Illinois Gov. Pat Quinn vetoed a bill Monday that would have allowed utilities owned by Exelon Corp. (EXC) and Ameren Corp. (AEE) to raise rates to pay for smart meters and replace other electricity infrastructure, saying the plan contained "sweetheart deals."

The bill would have allowed Exelon's Chicago-based Commonwealth Edison utility to install digital smart meters throughout its service territory and upgrade other parts of its electric grid over 10 years. The company has said the smart meters could save customers $2.8 billion on their electric bills over 20 years and help the utility cut the number of outages that occur during storms and other disruptions.

Opponents of the bill, including Illinois Attorney General Lisa Madigan, said the measure would be lucrative for the utilities but costly for consumers.

Quinn said that although he supports smart grid technology, the legislation "puts too heavy of a burden on consumers," that it "contains sweetheart deals for big utilities" and that it could "erod[e] more than a century of consumer protections."

Commonwealth Edison said the legislation was "a jobs bill" that had support from business groups, labor unions, environmental organizations and green tech entrepreneurs. The utility said in a statement that it would continue working with state lawmakers on grid modernization efforts.

Shares of Exelon were off 37 cents at $42.07 in after-hours trade; shares of Ameren were inactive post-market.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com

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