CUB Guide Details Significant Changes To ComEd Electric Bills, Roller-Coaster Year Begins With Summer Of Savings

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Jun 19, 2012, 10:34 ET

CHICAGO, June 19, 2012 /PRNewswire-USNewswire/ -- Commonwealth Edison customers will save an estimated $122.2 million this summer—up to $43 per customer—then see a jump in fall rates before enjoying what is expected to be a significant decrease next June, according to a new guide released Tuesday to explain one of the most confusing, roller-coaster 12-month periods in the history of Illinois' electric market.

Released on the eve of the first day of summer, the Citizens Utility Board (CUB) guide, "June Changes to Your ComEd Bill," is at www.CitizensUtilityBoard.org.

"We've all bought a ticket to this roller coaster, so we should understand where it's going," CUB Executive Director David Kolata said. "The good news is electric bills will be down this summer and next—but you should be prepared for higher rates in between."

Both parts of electric bills, supply and delivery, are decreasing this summer for most consumers. Supply, about two-thirds of a bill, covers the actual electricity used. The other third covers delivery charges—what consumers pay to get electricity delivered to their homes.

June-September 2012: CUB estimates overall savings of up to $43—nearly $11 a month—for a typical customer using 900 kilowatt-hours of electricity per month, June through September, compared with the same period last year. The decrease is partly due to lower energy prices that brought down ComEd's supply rate. On top of that, state regulators on May 29 ordered a $169 million delivery rate cut.

The Illinois Commerce Commission (ICC) ruling is part of ComEd's new "formula rate," which was created by a state law passed last year to cover $2.6 billion in power-grid upgrades for up to the next decade. The legislation allows ComEd to set rates by formula rather than a traditional 11-month regulatory case. The formula is expected to spark yearly rate hikes beginning in January, but it led to a decrease for now, because ComEd has yet to launch major upgrades and 30-year Treasury bond rates, a key part of the formula, are currently low.

The only customers to see a slight increase in supply rates this period will be "space heat" customers—those who heat their homes with electricity. Lower space heat rates are being phased out after an ICC investigation found that customers who heat their homes with electricity were being improperly subsidized by other customers. But even space heat customers will see an overall drop in their electric bills, in part because of the decrease in delivery rates.

October 2012-May 2013: The summer's good news is tempered by rate hikes looming this fall and winter. Supply rates will jump 20 percent for non-space heat customers in October. That bill increase—a little more than $1 a month— is softened by the delivery rate cut recently approved by the ICC. However, delivery rates are expected to go up in January 2013, under the new ComEd formula plan.

Although market prices are down, the supply rate hike is due to the fact that ComEd has been locked in higher priced electricity contracts in recent years, keeping the utility's supply rate artificially high and allowing alternative suppliers to enter the Chicago-area market. However, it remains to be seen whether those suppliers will be able to compete beyond next summer.

June 2013: As the last of ComEd's higher-priced electricity contracts expire, ComEd's supply rate is expected to drop significantly a year from now, in June of 2013. Until then, communities that have launched "municipal aggregation" programs, where local leaders negotiate power prices with an alternative supplier, look to be the biggest winners, with many locking in rates lower than a nickel per kilowatt-hour (kWh). Assuming a 4.8 cents per kWh rate, consumers in those communities stand to save $121 this summer. Despite that good news, the jury is still out on whether electricity choice will save consumers money beyond June of 2013.

CUB's guide includes sample bills to show space heat and non-space heat customers exactly how their bills are being impacted. Plus, it gives strategies on how consumers can protect themselves from upcoming increases. That includes how to avoid a questionable deal with an alternative supplier, and how energy efficiency can cut costs. CUBenergysaver.com is CUB's free efficiency tool that has been showing consumers how to save an average of $130 a year.

CUB is Illinois' leading nonprofit utility watchdog organization. Created by the Illinois Legislature, CUB opened its doors in 1984 to represent the interests of residential and small-business utility customers. Since then, CUB has saved consumers more than $10 billion by helping to block rate hikes and secure consumer refunds. For more information, call CUB's Consumer Hotline, at 1-800-669-5556, or visit CUB's award-winning website, www.CitizensUtilityBoard.org.

SOURCE Citizens Utility Board