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Q&A: Hourly Pricing and price spikes

What is ComEd’s Hourly Pricing program?

Under traditional rates, people pay a flat amount for electricity supply that changes only a few times a year.  Hourly Pricing is an alternative pricing plan in which participants pay a supply rate that is subject to more immediate market conditions and can change hourly. While over the course of a day, the Hourly Pricing rate can go higher than the standard rate—particularly during times when demand for power is highest (like hot summer afternoons)—the hourly price is usually lower than the standard rate.  In the past, Hourly Pricing customers saved an average of about 15 percent off the supply side of their bills, and even more when they were able to move more of their electricity usage to times of the day when energy demand was lower.

What is going on with ComEd’s Hourly Pricing program? 

Over the past 18 months, extreme market conditions have been impacting energy customers across the world.  These conditions have led to more frequent price spikes in ComEd’s Hourly Pricing program than we’ve previously seen, leading to reduced savings or even losses for program  participants. While Hourly Pricing has in the past saved money for about 80 percent of participants, market conditions in 2021 reduced the percentage of customers saving to just over half. 

How high have hourly prices spiked? 

In February of 2021, ComEd’s Hourly Price reached about 32 cents per kilowatt-hour (kWh)—more than four times ComEd’s standard rate at the time. This year, the price spiked to a range of $1.19 per kWh to a record $2.30 per kWh for three hours in mid-June. Although this was only for three hours–such price spikes usually are temporary–those amounts were alarming to customers and advocates alike. (Note: The Hourly Pricing program has a price cap of $3.70 per kWh, and over the history of the program it has never reached that cap. Read more below.)

Why is this happening? 

A number of developments in the energy market have led to volatile power prices. Record cold in the South in the winter of 2021 disrupted the natural gas distribution system and caused  heating prices to skyrocket. Since then, other issues have kept prices elevated. That includes  rising demand for heating gas as the economy pulled out of the pandemic, gas-production disruptions caused by Hurricane Ida, and the Russian invasion of Ukraine, which has disrupted European energy supplies and driven up demand for liquefied natural gas from the United States. When natural gas prices are high they eventually impact electricity prices, because gas plants are a major generator of electricity.

Is a price cap in place for Hourly Pricing customers?

Yes, Hourly prices are capped at a maximum of $3.70 per kWh by PJM, the power grid operator in northern Illinois. The Hourly Pricing FAQs say the energy supply costs in this program have never reached $3.70 per kWh. ComEd does not control the market price of energy and under law cannot mark up the supply costs of the power it delivers. But the utility does offer Budget Billing to help customers smooth out large monthly variations in electric bills.

If I’m on Hourly Pricing, should I stay on it during this high-priced time? 

If you’ve saved on the program in the past, it’s probably still a good fit for you—but here are a few facts that can help you make a final decision. 

  • ComEd offers a tool that can help you compare what you would pay on standard rates vs. Hourly Pricing rates. It requires you to login to your online account, where you can also view your own hourly usage charts. Make sure to look at those charts too—this is important, because whether you save or not in Hourly Pricing depends on how much electricity you’re using in any one hour.
  • Remember that all energy customers are enduring high prices right now. ComEd’s standard rate has increased by about 60 percent. 
  • This program is a particularly good fit for customers who heat their homes with electricity, customers who have to charge an electric vehicle at home, and customers who have solar panels at their homes. 
  • If you decide to take a break from Hourly Pricing, you can exit the program at any time without paying a fee. However, under Hourly Pricing rules you can’t re-join the program for another 12 months. 
  • Before you make a final decision, call the Hourly Pricing hotline, at 1-888-202-7787, to discuss your options. The program is run by Elevate, a nonprofit that offers clear, transparent guidance on whether you are a good candidate for the program. 

Should I sign up for Hourly Pricing? 

If you’re interested in signing up for the Hourly Pricing program, but don’t know if you are the right fit or if it’s the right time to join… 

  • Remember, the program is a particularly good fit for customers who heat their homes with electricity, customers who have to charge an electric vehicle at home, and customers who have solar panels at their homes. Read our fact sheet on Hourly Pricing and visit ComEd’s webpage devoted to the program, HourlyPricing.ComEd.com.
  • A key factor in whether you save or not on Hourly Pricing is the “capacity charge” you pay. Capacity is a separate line item on Hourly Pricing bills, and it covers a charge customers pay to big power generators to make sure there’s enough reserve power available when demand is highest. You can determine what your capacity charge would be on Hourly Pricing by following the steps CUB outlines here, or by calling ComEd’s Hourly Pricing hotline to ask. (Number below.)
  • Call the Hourly Pricing hotline, at 1-888-202-7787, to discuss if you are a good candidate for the program.