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
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.
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.