Illinois ORMD: Retail Supplier Customers At ComEd Paid 1.4¢/kWh More On Average Than Default Service During Past Year
Yearly Cost Under Retail Supply Versus SOS Is $138 Million Higher At ComEd; $89 Million At Ameren
Muni Aggregation Still Accounts For Half Of Residential Retail Supply Service
July 3, 2018 Email This Story Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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As part of an annual report, the Illinois Commerce Commission's Office of Retail Market Development reported on the aggregate cost that customers of alternative retail electric suppliers paid in excess of the utility's default service rate, for the period June 2017 to May 2018
ORMD reported that, "On average, residential ARES customers in the ComEd territory paid around $10.2 million more per month during the last twelve months when compared to the ComEd Price-to-Compare (PTC) and $11.5 million more per month during the last twelve months when compared to the ComEd PTC including the Purchased Electricity Adjustment (PEA). In terms of cents per kWh, residential ARES customers in the ComEd territory paid about 1.289 cents/kWh more when compared to the ComEd PTC only, and about 1.445 cents/kWh more when including the PEA."
At ComEd, for residential customers, ARES customers in aggregate paid $138 million more for the year versus default service (including PEA impacts)
ORMD reported that, "In the Ameren Illinois territory, residential ARES customers paid around $6 million more per month during the last twelve months when compared to the Ameren Illinois PTC and $7.4 million more per month during the last twelve months when compared to the Ameren Illinois PTC including the PEA. In terms of cents per kWh, residential ARES customers in the Ameren Illinois territory paid about 1.073 cents/kWh more when compared to the Ameren Illinois PTC only, and about 1.330 cents/kWh more when including the PEA."
At Ameren, for residential customers, ARES customers in aggregate paid $89 million more for the year versus default service (including PEA impacts)
We would note that, when considering the comparisons to default service, nearly half of all ComEd residential ARES customers are served via municipal aggregation, and more than half of Ameren residential ARES customers are served via municipal aggregation
ORMD reported that the share of residential aggregation customers was 52% of all residential ARES customers in May 2018. This is down from 56% a year earlier and down from 64% two years ago.
In the ComEd area, 494,993 of the 1,150,368 residential ARES customers, or 43%, are government aggregation customers. This share is up from 39% last year but still less than two years ago when the share was 55%. There are almost 10,000 more residential aggregation customers in the last year. However, the total number of residential ARES customers decreased by about 95,000 during the same period, so the number of residential customers on non-aggregation ARES service declined.
Of the 624,014 residential ARES customers in the Ameren Illinois areas, 431,258 (or 69%), are government aggregation customers. This represents a 21 percentage point decrease compared to the 90% aggregation share from a year earlier. The number of residential aggregation customers decreased by almost 139,000 in the last year. Given that the number of total residential ARES customers decreased by only about 12,000 during the same period, the number of residential customers on non-aggregation ARES service increased significantly in the Ameren Illinois areas during the last 12 months to close this gap, ORMD said
In calculating the monthly savings versus default service, ORMD explained that, "Monthly reports from ComEd and Ameren Illinois provide us with the necessary usage information, and the utilities’ default rates are tariffed rates. As for the ARES prices, almost all suppliers provided us with monthly average residential rates for the past twelve months in response to a Staff Data Request."
ORMD further explained that:
"While reviewing these estimates, it is important to keep in mind several caveats:
1. These are total, or aggregate, savings and the savings for almost all individual customers differ from these averages.
2. These calculations are ex-post calculations and do not take into account how the ComEd default rates would have been different had more or fewer customers stayed on the utility’s default supply service.
3. Most of the ARES with residential customers have at least one offer that features a renewable energy content higher than what is required under the Illinois Renewable Portfolio Standard. The average rate information collected from the ARES include the (usually higher) prices associated with those offers.
4. Not captured in these numbers are rewards and incentives that are not part of the ARES electric supply rates. For example, several suppliers offer one-time gift cards as an incentive to sign up for a particular offer and other offers contain rewards such as airline miles and other non-rate benefits. However, those non-rate benefits are hard to include in such a calculation and would require us to make several more assumptions as well as additional detailed data from the ARES. For these reasons we decided to compare just the average rates of the suppliers to the rates of the utility PTC."
Using Herfindahl–Hirschman Index values, ORMD reported that overall, the electric supply markets are becoming less competitive -- or more concentrated -- for non-residential customers statewide and residential customers in the ComEd territory.
The ComEd residential HHI, while still "competitive" or "unconcentrated", spiked from 696 in 2017 to 1,250 in 2018
All Ameren rate zones continue to see "high concentration" HHI values for the residential market
As of May 2018, in the ComEd residential market, the market share of the 3 largest suppliers was 48%, up from 42% a year ago. There was 1 ARES with greater than 15% market share and 3 ARESs with 5-15% market share (both flat versus the year-ago). At ComEd, 49 of the 53 ARESs with residential customers had a market share of less than 5%, and 31 of the ARESs with residential customers had a market share of less than 1%
ORMD also reported that, "There is significantly less competition for aggregation contracts in the Ameren Illinois markets than there is for aggregation contracts in the ComEd market. Every initial aggregation contract in the last four sets of Ameren Illinois aggregation communities was won by two suppliers (one for all the March 2014 through March 2016 referendum dates and another for the November 2016 referendum dates)."
ORMD reported that the ICC Consumer Services Division generally receives 100-200 informal complaints per month for 30-40 ARESs. These complaint quantities represent 0.006% - 0.01% of ARES customers per month.