When you’re taking on big utilities, the victories never come easy, but CUB’s legal team has some good news for ComEd and Ameren customers: Your delivery rates will be reduced in 2020.
This is a nice development, but it’s been overshadowed by an upcoming ruling by the Federal Energy Regulatory Commission (FERC) that could impact another part of your bill (supply costs) and raise ComEd bills by up to $864 million a year. Read CUB’s consumer alert.
Now back to the good news: ComEd’s delivery rates are expected to be reduced by at least $16.5 million on January 1. Ameren’s delivery rates will be cut by at least $7.22 million. That’s the report from CUB General Counsel Julie Soderna. She and Senior Attorney Kelly Turner have been working on and monitoring these two “formula rate” cases before the Illinois Commerce Commission (ICC).
ComEd and Ameren delivery rates are set according to the state’s 2011 “Energy Infrastructure and Modernization Act,” or the “smart-grid bill.” That law uses a formula to determine the utilities’ delivery rates annually to pay for about $3 billion in system upgrades.
This way of setting electric rates limits how much consumer advocates and regulators can reduce rate hikes. But each year CUB works to secure the lowest rates possible by reviewing the utilities’ spending and protesting unjustified capital and operational expenditures. The consumer watchdog also constantly pushes the utilities to live up to their promise to build a more affordable power grid that reduces inefficiency, improves reliability and gives customers the chance to save money by making their homes more efficient and taking part in money-saving electricity programs.
The decrease in utility delivery rates is connected to lower projected costs as installation of new digital meters nears completion, as well as a reduction in the federal corporate tax rate that customers began to see on their bills last year. These cases affect delivery charges—what all customers pay to have the electricity delivered to their homes. Those charges take up about a third to a half of the bill.
Here’s a rundown of each formula rate case:
ComEd (ICC Docket # 19-0387)
ComEd filed its annual formula rate update on April 8, requesting a $6.4 million rate reduction. CUB co-sponsored expert testimony with the Illinois Industrial Energy Consumers (IIEC), and coordinated with the Illinois Attorney General Office’s expert witness to make a recommendation on a depreciation issue that will over time have a $25 million impact. Meanwhile, the ICC Staff raised several issues that led to ComEd making the proposed rate cut even bigger: $16.5 million.
Ameren (ICC Docket # 19-0436)
Ameren also requested a reduction, $7.22 million, in April. CUB filed testimony with IIEC proposing that the rate cut should be doubled to $15.7 million.
ICC rulings on both cases are expected in December, and the new rates would take effect Jan. 1, 2020.
We’ll keep you up-to-date on developments concerning your delivery rates before the ICC, and developments concerning your supply costs in front of FERC.