Something to think about. It seems like electric rates keep going up, and solar costs continues to drop?…seems like the stars are aligning (or sun for that matter) for you to make a change.
Below is an article that was published in the Crain’s Chicago Business, discussing what ComEd customers have to look forward to…
Next month’s electricity price hike is just the start
By Steve Daniels May 23, 2017
The substantial hike in Northern Illinois’ cost of electricity beginning next month is just the beginning of the increases for years to come.
With energy costs remaining at historically low levels, the price all consumers pay qualified power generators simply to promise to produce during the highest-demand days of the year keeps rising.
These “capacity” costs—essentially an additional reservation price embedded in the energy cost ComEd customers see in their electric bills—will approach the cost of the electrons themselves beginning in 2019 and now continuing through the first half of 2021.
The bottom line for customers of Commonwealth Edison is that the 8 percent increase they’ll experience in their electricity rates over the next several months is just the first installment.
The reason: The capacity charge is set three years in advance. PJM Interconnection, the regional power-grid operator for Northern Illinois and all or parts of 12 other states to the east plus Washington, D.C., holds an auction each year at this time to establish the capacity price three years from now.
For the second auction in a row, ComEd’s capacity charge far exceeds the rest of the PJM region, according to results disclosed today.
Northern Illinois power users in the year beginning June 2020 will pay $188.12 per megawatt-day for the promise to keep the lights on when temperatures soar. Customers in most of the rest of the PJM region will pay just $76.53 in that year.
Increases already will begin to hit ComEd customers’ wallets next month. They will pay 6.89 cents per kilowatt-hour for energy starting in June, 9 percent more than they’re paying for power today. (Energy accounts for about half the typical electric bill, with delivery rates and other charges making up the rest.)
In October, that cost will rise again to 7.15 cents per kilowatt-hour, 13 percent above today’s price.
That will hike the total electricity rates (including the cost of delivery) about 8 percent.
By June 2018, when the capacity cost more than doubles to $209.32 per megawatt-day from $101.62 today, that alone will hike the energy cost here to about 7.54 cents per kilowatt-hour—a 5 percent increase on top of the 13 percent increase customers will see by October.
The primary beneficiary is ComEd’s parent, Chicago-based Exelon, whose five nuclear stations in Northern Illinois supply most of the power here.
Exelon’s nuclear plants in Illinois have become substantially less profitable due to the low wholesale power prices. The higher future capacity prices will relieve some of that pressure.
In addition, Gov. Bruce Rauner signed into law late last year ratepayer-funded subsidies for two Exelon-owned nukes that have been losing money.
The level of those subsidies, which can reach $235 million annually, are determined based on what Exelon fetches in the open market, as filtered through a complicated formula in the law.
Exelon disclosed today that all of its Northern Illinois nukes “cleared” the capacity auction except for its Quad Cities plant. Exelon was readying to close Quad Cities last year before enactment of the state’s “Future Energy Jobs Act. Quad Cities is in line to receive ratepayer subsidies beginning later this year under that statute.
The subsidy for Quad Cities in 2017, 2018 and 2019 is more or less set under the formula in the law.
For 2020, Exelon likely will bid Quad Cities in a later “incremental” capacity auction in order to garner some revenue, Executive Vice President Joe Dominguez said in an interview. In setting the value of the subsidy, the law assumes Quad Cities gets the capacity price in Northern Illinois whether the plant clears the auction or not.
Northern Illinois consumers will pay both the capacity price and the nuke subsidy.
Quad Cities bid so high that it didn’t qualify because the law doesn’t take effect until June 30 and the company can’t assume the plant will qualify, even though Exelon expects it will, Dominguez said. “It’s a timing issue.”
PJM has tightened the rules for bidding into its capacity auction in a way that’s ensured the costs will rise in ComEd’s territory. PJM responded to nuclear generators, of which Exelon is the largest in the country, who complained that the market wasn’t appropriately valuing the around-the-clock production of their nukes.
PJM’s first and highest priority is to ensure there’s sufficient power to keep the lights on when demand spikes, typically during heat waves and cold snaps.
Capacity prices are paid by all consumers and businesses, whether they get their power from ComEd (which passes through the cost without marking it up) or an alternative supplier. The higher capacity prices will be seen in the future offers consumers get from ComEd competitors.
The story has been corrected to reflect how the Quad Cities nuclear plant is treated in the Future Energy Jobs Act, and to correct the extent of the expected electricity price increase in 2018.