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Mar 11 2020
Comed Rates in Illinois – Should I switch Suppliers?
Illinois electricity markets were deregulated a few years back, and all the rage was saving money by switching to an alternative provider to Comed to save money on the electric bill. Even large municipalities were switching over their entire residential markets at one time, and contracts were one by a fraction of a penney per kWh. However, after the dust settled, it seems that more folks were hurt by switching away from Comed than by sticking with it.
In 1997, the state passed a law called “The Illinois Electric Service Customer Choice and The Rate Relief Law”. This law was designed to promote competition, which would open up more companies to sell electricity to consumers throughout the state. While the two large monopolies would still continue to provide the “pole and wire” or delivery of electricity to all buildings in the state, the supply (or actual electrons used) could be purchased by a number of alternative suppliers.
I am going to use a very rough estimation, but these two components are each about $.06 per kWh for your energy costs, for a total of $.12 per kWh combined. These two are roughly estimated because they are quite different for residential and commercial, and are wildly different based on your size. For a complete and current list of rates, and a good thing to help you fall asleep tonight, check out this Comed Rate info page.
Monetary Saving – or Lack Thereof
There are huge expectations that customers will save significant money in energy deregulation. In fact, there is a huge risk of adding extra layers of complexity to the market and adding costs as well. Think of Enron, and ignore the fraud, but the huge amount of employees and infrastructure that was added to hedge, buy and sell electricity. They can create some efficiencies, but there are also a ton of added people involved in the market – and those people need to get paid.
Another concern is that the deregulated customers are only saving on half their energy costs, the supply side. Since that is only half of their bill, if you save 20% on half your bill, you are really only seeing a net savings of 10%.
Benefits of Buying from Your Utility
One of the benefits of buying electricity from the monopoly provider is that they need to approve all rates from the Illinois Commerce Commission, as well as oversight from the Illinois Power Authority. Comed and Ameren can’t just jack up rates 50% and let that one sneak by. However, a third party seller can lock you into a competitive one year contract, only to escalate the contract by extravagant amounts in the future. I am not saying that all players in the market do this – but there is not one that I trust enough to recommend our customers to work with. We recommend that customers stick with Comed.
In addition, Comed is a huge advocate of the Future Energy Jobs Act, as well as supporting Nuclear Power Generation in Illinois. Yes, Nuclear Power has huge concerns, but as far as carbon emissions – there are none (or very little). We have found Comed to be authentically wanting their customers to be more energy efficient and while not perfect, they do strive to provide great customer experience.
They might be some inefficiencies with one provider, but it is not significant enough to be made up with moving at this time. The only exception is the chance to get great airline miles or other perk when signing up, but you have to ask yourself if that is really worth the risk. When you deregulate energy, you open up a ton of snake oil salesman to the market, that are not always looking out for the best long term interest.
It is better to spend your time and energy in reducing your energy, which leads to long term bottom line savings. And those opportunities are all in unexpected places over your building, you just have to know where to look.
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