By: Steve Daniels |
Commonwealth Edison customers will see their electricity rates rise modestly this summer, but that’s just a prelude to a more dramatic increase beginning in the fall and running through next May.
The price ComEd charges for electricity, along with its charge to move that power from plants to its local delivery system via high-voltage lines, will increase 2.3 percent in June to 7.358 cents per kilowatt-hour. The increase will be more than 10 percent beginning in October. That’s when the cost will hit 7.941 cents per kilowatt-hour, the Chicago-based utility said.
The non-summer price is ComEd’s highest in more than five years.
Costs for consumers aren’t rising because underlying electricity prices are going up. Those remain at historically low levels thanks to a glut of cheap natural gas that plant operators increasingly are turning to for fuel. Rather, the main reason is extra costs consumers pay power generators to ensure their plants are available during the highest-demand days of the year. Those costs, embedded in electricity prices and determined via an annual power-generator auction conducted by regional power-grid administrator PJM Interconnection, are rising steadily.
PJM, alarmed that low energy prices will force too many power plants to close and put reliability at risk, has taken steps to boost those “capacity” prices by making changes to its arcane auction rules.
Power costs make up only a portion of electric bills. The costs, set via a different annual auction conducted in the spring by the Illinois Power Agency, are passed along to ComEd customers without markup.
ComEd profits through its charges to deliver the juice. Those rates, too, have been on the rise since ComEd was granted the right to adjust rates annually via a formula to finance a $2.6 billion grid modernization program. That program, authorized in 2011, is nearly complete.
Households currently pay about 6 cents per kilowatt-hour for delivery and surcharges supporting new renewable-energy development in Illinois and nuclear plants owned by ComEd parent Exelon.
So the percentage impact on total electric bills for ComEd customers will be 1 percent in the summer and 6 percent beginning in the fall. ComEd has given ratepayers a break for one year on distribution rate hikes, thanks mainly to federal tax savings, and has petitioned the Illinois Commerce Commission for a modest decrease, taking effect next January.
The average ComEd household then will see their bills increase by about $38 over the coming year due to the increases, assuming normal seasonal temperatures. Increases for residents of larger single-family homes will be more like $55 in a year.