Illinois ORMD: Residential Retail Supplier Customers At ComEd Paid 1.6¢/kWh More On Average Than Default Service During Past Year

At Ameren, Where Residential ARES Customers Are "Overwhelmingly" Aggregation Customers, ARES Customers Paid 1.6¢/kWh More Than Default Service

Yearly Cost Under Retail Supply Versus SOS Is $124 Million Higher At ComEd; $122 Million At Ameren

Muni Aggregation Still Accounts For Half Of Residential Retail Supply Service

July 1, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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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 (ARES) paid in excess of the utility's default service rate, for the period June 2018 to May 2019

The Office of Retail Market Development (ORMD) report said, "on average, residential ARES customers paid around $8.13 million more per month during the last twelve months when compared to the ComEd PTC. In addition, given that the PEA [Purchased Electricity Adjustment] was a credit in each of the twelve months during the June 2018 through May 2019 period, the gap between the ComEd supply price and the average ARES price increased even more. In terms of cents per kWh, residential ARES customers paid about 1.30218 cents/kWh more when compared to the ComEd PTC only, and about 1.65819 cents/kWh more when including the PEA."

Including the impact of the PEA, on average, residential ARES customers paid around $10 million more per month than ComEd default service, over the past 12 months

For the entire period June 2018 through May 2019, ORMD said that residential customers on competitive supply paid $97 million more ($124 million including PEA) than what they would have paid on ComEd supply

At ComEd, an average ARES customer using 1,200 kWh/month during the planning year that ended in May 2019 paid $239 more than default service

"[T]hese numbers are averages and almost all customers are either below or above the average," ORMD noted

In the eight years ORMD has been comparing the costs, the eight-year total at ComEd is that residential ARES customers paid in aggregate $216.4 million more than ComEd supply service when excluding the PEA, or $282.7 million more with the PEA

At Ameren, ORMD said that, "residential ARES customers (which were overwhelmingly aggregation customers), paid about 1.6 cents more per kWh than Ameren Illinois bundled service customers between June 2018 and May 2019 when taking into account the PEA."

Excluding the PEA impact, ORMD said that, on average, residential ARES customers paid about 1.4 cents more per kWh than Ameren Illinois bundled service customers over the past 12 months

At Ameren, on average, residential ARES customers paid around $9 million more per month during the last twelve months when compared to the PTC ($10 million including the PEA).

For the entire period June 2018 to May 2019, ORMD said that residential customers at Ameren on competitive supply paid $109 million more ($122 million including PEA) than what they would have paid on Ameren supply

ORMD in the report noted that, when reviewing these comparisons, it is important to keep in mind several caveats:

• These are total, or aggregate, savings and the savings for almost all individual customers differ from these averages.

• 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.

• 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.

• 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," ORMD said

Concerning municipal aggregation, as of June 2019, 204 of the 728 communities (about 28%) who implemented an aggregation program let their aggregation end

Since 2018, 30 communities with municipal aggregation programs that had previously ended implemented them again. The average rate for a municipal aggregation program in the ComEd territory is 6.845 cents per kWh. In the Ameren territory, it is 5.663 cents per kWh.

The share of residential aggregation customers was 52% of all residential ARES customers in May 2019, which remains steady compared to May 2018.

The ORMD report also includes discussion of switching statistics.

Nearly 85% of the non-residential (commercial and industrial) power usage in the ComEd and Ameren service territories were served by ARES. The share of ARES-provided non-residential usage statewide has been fairly constant over the last five years.

At the end of May 2019, about 1.78 million residential customers were on ARES service, compared to about 1.77 million customers in 2018 and over 3 million customers five years ago.

The number of residential ComEd customers receiving supply from an ARES decreased slightly over the last year while the number in the Ameren Illinois service territory increased slightly over the same period. As of May 2019, approximately 32% and 60% of residential customers received service from an ARES in the ComEd and Ameren Illinois territories, respectively.

The last year saw some growth in the number of active ARES. As of May 2019, there were 68 active ARES offering supply to residential customers in the ComEd service territory (up from 60 a year earlier), and 29 suppliers offering residential customers supply in the Ameren Illinois service territory (two more than a year earlier). Of the offers posted on PlugInIllinois for residential service in the ComEd service territory, 86% were fixed rate offers and 10% were variable rate offers (see page 25 of the report for details).

See the ORMD report here

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