Annual Illinois Retail Market Report: Only One Supplier at ComEd Has Greater Than 15% of Switched Residential Customers

The Illinois Commerce Commission's Office of Retail Market Development has posted its annual report on retail electric competition, and for the first time the report includes a review of market concentration in the residential market.

Link to ORMD Report

ORMD noted that Herfindahl-Hirschman Index (HHI) values indicate that the ComEd residential market would be considered "unconcentrated" per the DOJ and FTC's Merger guidelines, with an HHI of under 1,000 as of May 2012.

ORMD further noted only a single retail supplier at ComEd has greater than 15% market share of the residential customers who have switched, as of May 2012

Only five suppliers -- of the 27 suppliers with ComEd residential customers -- have greater than 5% market share of the residential customers who have switched.

The aggregate market share, of switched residential customers, of the largest three retail suppliers at ComEd was 44% as of May 2012. ORMD noted that over the past 12 months, the three largest suppliers in a particular month were not always identical each month.

ORMD also included a pie chart of each supplier's (with the supplier not identified) share of switched residential customers, highlighting the unconcentrated nature of the market:

Link to ORMD market share chart

While not specifically noted by ORMD, this balance in residential market share has the potential to become more concentrated as more municipal aggregations begin service.

As of May 31, 2012, some 406,000 ComEd residential customers had switched to a competitive supplier and had completed one billing cycle on competitive supply.

ORMD said that approximately 70,000, or about 17%, of these customers were participating in a municipal aggregation. This total does not likely include the bulk of the opt-out aggregations approved in March 2012 (amounting to some 300 communities statewide), given the lag in the enrollment and then billing periods (the migration stats only count customers billed on competitive supply, and not newly switched but unbilled customers).

As has been detailed by Matters, since August 2011, the monthly increase in the number of residential customers on competitive supply at ComEd has consistently been above 20,000 and reached more than 50,000 in October 2011 and February 2012. The average monthly growth in residential customers on competitive supply for the past twelve months has been approximately 32,000 residential customers.

At Ameren, the monthly increase in the number of residential customers on competitive supply has been near or above 10,000 customers for every month in 2012 so far, ORMD noted (aggregate of all 3 rate zones)

The Ameren rate zones have higher residential market HHI values -- ranging from 3,000 to 4,000 as of May 2012 -- but the HHI values have declined significantly over the past 12 months as more suppliers become active in the Ameren residential market (growing to 10 as of May 2012 versus three a year ago).

The number of residential customers on competitive supply (and having completed one billing cycle on competitive supply) at Ameren as of May 31, 2012 was as follows:

Rate Zone I: 28,459

Rate Zone II: 12,752

Rate Zone III: 47,124

ORMD's report also lists the percent of load switched as of May 31, 2012 for each territory (most recent detailed stats available are as of April 30, 2012, as first reported by Matters)

ICC Staff did not offer any specific legislative recommendations in the report, but noted the anticipated municipal aggregation rulemaking expected to be opened in August (as first reported by Matters), and noted that, depending on the rulemaking's outcome and if there are unresolved issues, ORMD will work with interested parties and the General Assembly to resolve any remaining issues legislatively.