ComEd gets OK for $245 million, consumers see hike in January
ComEd will increase its rates for delivery of your electricity starting in January, regardless of what company you have that supplies the power.
The Illinois Commerce Commission, which regulates utilities, allowed ComEd on Wednesday to collect an additional $245 million in revenue. The utility had requested $275 million.
But what that will mean to the average consumer's monthly bill is not yet clear, said a ComEd spokesman and the Citizens Utility Board, a Chicago-based consumer watchdog.
"CUB is disappointed in this increase, especially as it will hit consumers in the heart of what could be another expensive winter," said CUB spokesman Jim Chilsen. "Illinois' new way of setting electric rates by formula limits how much consumer advocates and regulators can reduce proposed increases."
CUB plans to file a petition for rehearing to lower the increase, Chilsen said.
ComEd said it has not received the final order from the ICC and will "reserve comment on the projected impact on customer bills until we have had a chance to review the details," said ComEd spokesman David O'Dowd.
Last year, ComEd filed for the additional revenue, stating it was needed to upgrade the network and pay for its ongoing installation of smart-grid meters for its 3.8 million customers. In May, the Daily Herald reported that consumers should be prepared for additional costs on their electric bills because of the rising cost of power. Consumers started seeing increases in June with an average from $67 per month to $86 per month. Also, ComEd officials said at that time that another potential $3 per month could be added by January 2015 for the cost of delivery. Whether it remains at about $3 after Wednesday's order is unclear.
ComEd's delivery charges make up about one-third to one-half of the bill. The rest of the bill is the cost of the electricity itself. That supply rate is determined through a power-buying process managed by the Illinois Power Agency, a state agency, or by an alternative supplier, if a customer is with one.
This delivery rate hike will affect all customers, regardless if they obtain their power from an alternative supplier, Chilsen said.
The delivery increase is part of the 2011 Energy Infrastructure and Modernization Act, or the smart-grid bill. The new law uses a formula to determine ComEd and Ameren rates annually for the next several years to pay for about $3.2 billion in system upgrades.
ComEd originally proposed an increase of $275 million. Adjustments were made in the company's requests related to its annual incentive program, depreciation costs, customer care costs and elsewhere, said ICC spokeswoman Beth Bosch.
The ICC order follows a review during the past nine months of revenue, expenses and capital projects, specifically those installed as part of the company's commitment to upgrading its infrastructure and installing new advanced electric meters under the state law, Bosch said.
The act allows participating utilities that agree to make specified investments in electric reliability and smart grid projects to recover their costs annually under a prescribed formula rate. The act ensures that ComEd recovers its cost investment in improving the reliability of its electric grid in a timely manner, Bosch said.
ComEd filed its initial formula rate petition in November 2011 and has adjusted rates in 2012, 2013 and 2014 using the formula, she said.
The smart grid legislation investments have directly benefited customers with historic improvements in reliability including 30 percent improvement in storm restoration times and more than one million avoided customer power outages, said O'Dowd.
"The program continues to meet and in some cases exceed the metrics outlined in the legislation, while also providing tremendous benefits to the state's economy with the creation of thousands of jobs in the region," O'Dowd said. "ComEd is committed to continuing this progress and delivering on the smart grid law metrics and promises."
More than 660,000 customers have received digital smart meters, which make it easier to control energy consumption and cost and take advantage of programs that can lower electricity use during high demand periods. ComEd will complete the installation of nearly 4 million smart meters in 2018, about three years ahead of schedule, O'Dowd said.