Illinois Deregulation History

ILLINOIS ELECTRIC CHOICE
Illinois has completed the transition to a competitive retail energy supply market. The process began in 1997, and since then, the cost of electrcity supply has been frozen. During this period some Illinois businesses had been able to save money by taking advantage of an alternate energy supply product offered by ComEd called the Power Purchase Option (PPO), while others benefited from contracting with a third party supplier. ComEd and Ameren are now offering new default supply rates based on the results of a wholesale reverse auction that was conducted in the fall of 2006. These new default rates mean a dramatically higher cost for all electricity users, with increases from 10% to 80% effective January 1, 2007.

Some other changes in the Ilinois electric market include:
  • Customer Transition Charges (CTCs) have been eliminated: These were costs that ComEd and Ameren were allowed to charge for recovery of some stranded investments. Their costs varied depending on the market cost of power and the applicable rate schedule.

  • Rate Classes Simplified: New, simplified rate classes have been established in the ComEd and Ameren territories making it easier to understand and evaluate the opportunities for electric supply. In addition, all Ameren utilities (AmerenCIPS, AmerenIP and AmerenCILCO) will now have the same distribution rate classes.

  • Distribution rates the same: Distribution rates will now be the same regardless of whether you procure supply from the utility or a competitive supplier.

What all of this means: Consumers of electricity now have the ability to choose their supplier of electricity while the delivery of the power, or transmission and distribution (poles and wires), remain the responsibility of the "regulated" power company. Consumers have the capability to choose an electricity supplier that best fits their needs based upon price (terms & structures), financial stability, contract terms and conditions, and available service and billing options. Along with customer choice comes the necessity to understand, review, manage and facilitate the electric supply bid process as well as assess current market conditions.

REGULATED SERVICES
The delivery of electricity across poles and wires is called Transmission and Distribution (TDSP). These services are currently provided to you by your local wires company, which is responsible for maintaining the poles and wires, and responding to emergencies and power outages. The Public Utility Commission continues to regulate transmission and distribution service to ensure the safety and reliability of your electric service regardless of which Retail Electric Provider you choose. You do not have the ability to choose your local wires company.

Before deregulation, your electric service was provided by a single electric utility; ComEd, Ameren, etc. Your provider was determined solely upon location of the business or residence. To receive electric service, you simply called the local utility company that had the exclusive right to provide service in your area and paid the scheduled rate tariff set by the Public Utility Commission (PUCT).

No contract terms and conditions were required.

DEREGULATED SERVICES
With electric competition, retail energy suppliers sell energy commodities to you and provide functions such as customer service, pricing structures, and billing options. These companies purchase electricity from competing power plants, and electricity is delivered to your home or business over the poles and wires of your local wires company. Retail Electric Providers compete for your business by offering lower prices, renewable energy options, added customer service benefits or other incentives. With electricity deregulation, you now have the ability to choose the Retail Electric Provider that best fits your needs. If you do not choose a Retail Electric Provider, your electric service will be provided by your Affiliate Supplier – a company affiliated with your local wires company at the "price to beat" rate.
No matter which retail energy supplier provides your service, the Public Utility Commission continues to enforce customer protections and regulate the delivery of electricity to ensure it is delivered safely and reliably by the local wires company.