CHICAGO, Oct. 1, 2001 — Electric rates for Commonwealth Edison customers will drop by 6 percent, or $135 million Monday, as the second phase of a 20 percent rate cut ordered for the utility in 1997 takes effect.
The rate cut was negotiated by the Citizens Utility Board (CUB) and others and adopted as part of the Electric Service Customer Choice and Rate Relief Law of 1997, also known as Illinois’ electric deregulation law.
The first phase of the rate cut, 15 percent, took effect Aug. 1 1998. With the full 20 percent cut in effect, ComEd customers will have saved a total of $1.25 billion through the end of the year as a result of the new law.
“Other states have embarked on deregulation of their electric industries, but nowhere are residential consumers saving as much money as they are in Illinois,” CUB Executive Director Martin Cohen said. “And the lower rates we have today are locked in until 2005.”
According to a recent rate survey conducted by CUB, ComEd’s rates have dropped to roughly the national average and the Midwest average. Prior to the rate reductions, Edison’s rates were significantly above those of most other large metropolitan areas.
The 1997 law adopted a go-slow approach to deregulation, with competition among power suppliers phased in over time for different customers. Commercial and industrial customers were allowed to shop around for new power suppliers beginning in October 1999 and residential customers will have that choice in May 2002.
The reviews on how deregulation is working for those customers who are able to switch power suppliers are mixed. Just 22 percent of the eligible commercial and industrial customers have switched suppliers, suggesting that many customers do not see the potential for significant savings. There may be even less potential for residential customers to switch suppliers, since no one knows whether new companies will actively enter the residential market next year.
“Given what’s happened in California and other states, Illinois’ deregulation law looks better all the time,” Cohen added. “But there is still a lot of work to be done before we have a truly competitive electricity market that will benefit all consumers.”