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Q&A: ComEd prices are up, but landmark clean energy law delivering about $1B in monthly credits on power bills

What happened? 

While ComEd’s electricity price has been elevated since June 1, the Climate & Equitable Jobs Act (CEJA), historic clean energy legislation that Illinois adopted last year, is paying off for ComEd customers in the form of a monthly credit estimated to average about $18-$20 on electricity bills. CUB is pleased Gov. J.B. Pritzker and a bipartisan group of legislators made sure this consumer protection was built into CEJA.

How high is ComEd’s power price? 

ComEd’s supply rate rose 60 percent, to over 11 cents per kWh on June 1. As of Jan. 1, 2023, it is 9.665 cents per kWh, which is about 24 percent higher than last January. This rate includes the supply price and a transmission charge. ComEd does not profit off the price of electricity—they pass those costs onto customers with no markup. This rate is in effect through May 31, 2023.

Energy prices across the globe are skyrocketing due to a number of factors, including the Russian invasion of Ukraine.* Market conditions could change, but the good news is for now the CEJA credit is mitigating the impact of this supply price spike.

*Quick explanation: Russia has been a major supplier of natural gas to Europe, but the war has disrupted that supply or at least made it uncertain, creating demand for more gas from the United States. That has helped raise prices in the United States. An extended period of high gas prices often leads to higher electricity prices, because gas is used to generate power. But there are a lot of reasons for the high gas prices.

How much is the CEJA credit?  

According to a ComEd filing with the Illinois Commerce Commission, the rebate is about 4.1 cents per kilowatt-hour (kWh) on monthly bills through May 2023.  The credit amounts to an estimated $1 billion for residential customers collectively over the next year. It depends on your usage, but estimates of the credit range from an average about $18 per month to $20 per month, beginning June 1. The ICC said the credit works out to about $19.71 per month for the average customer. This will give consumers some relief from the high energy prices they are experiencing now.

What do I have to do to get this credit?

Nothing. This credit is going to most ComEd residential customers. You don’t have to apply for it or take any other action. 

When will the credit run? 

The credit started on June 1, 2022 and will run through May 31, 2023.

How will the credit appear on my bill? 

The credit appears on ComEd bills as a line item called “Carbon-Free Energy Resource Adjustment.”

What provision in CEJA led to this credit?  

Here’s more detail, according to the ICC:

CEJA contains a provision designed to protect consumers in the event of skyrocketing energy prices that the world is experiencing now. The law created a “Carbon Mitigation Credit” designed to give nearly $700 million over five years to keep three nuclear power plants open: Byron, Dresden and Braidwood. CUB Note: Keeping carbon-free nuclear power plants open is the fastest, cheapest way for Illinois to fight climate change, and serves as a bridge to the day when Illinois is fully powered by clean energy.

But customers haven’t paid a penny to the plants. That’s because the Carbon Mitigation Program also provides protection to Illinois customers if wholesale energy prices shoot up over a certain level. Amid dramatically high energy prices, the nuclear plants are earning more, so they don’t need the subsidy, and CEJA requires the owner of the plants, Constellation, to give it back to customers in the form of a credit.

How long will the credit last? 

Through May 31, 2023, for sure. If energy prices were to drop, the credit would end. However, according to the Illinois Clean Jobs Coalition, the credit could continue beyond May 31, 2023, depending on how high energy prices are.

Are there any other factors saving customers money? 

Yes. While the CEJA credit is the biggest factor, another is a significant drop in the price we pay for “capacity.” Capacity refers to payments to power plants to make sure they have enough reserve power to deal with electricity demand when it’s highest. The price is decided by an auction, and then gets wrapped into the price of electricity. (Read CUB’s Capacity Market explainer) In the last capacity auction, the price dropped from $198 a Megawatt/Day to $69 per MW/day, contributing to significant savings for customers. So while the price for electricity itself has gone up because of market conditions, the capacity component of the supply price has gone down.

If I am having trouble affording my utility bills, what can I do?  

There are several actions consumers can take:

  • See if you qualify for energy assistance. The application process for the Low Income Home Energy Assistance Program (LIHEAP) has reopened through May 31, 2023, or until funds are exhausted. Households at or below 200 percent of the federal poverty level are eligible for LIHEAP funding. To apply or learn more, visit www.helpillinoisfamilies.com or call the Help Illinois Families Assistance Line at 1-833-711-0374.
  • Contact your utility. If you are having trouble affording your energy bills, it is vital that you contact ComEd. Ask if you qualify for any energy assistance programs; see if you can set up a payment plan to give you a longer time to pay off your bills; and inquire about no or low-cost energy efficiency programs the company offers. Visit ComEd.com/SAM for more information on assistance programs.
  • Practice energy efficiency at home. For tips and information about helpful ComEd energy efficiency programs, visit CUB’s Clean Energy page. Also visit CUBHelpCenter.com for more information about energy assistance, tips on cutting your bills and your rights to avoid disconnection.
  • Consider a community solar deal to help ease costs. Community solar deals right now guarantee savings compared to ComEd’s supply price. But be a careful shopper: Get more information at our special website, SolarInTheCommunity.com. (Note: Several of the offers have a waitlist, so check with the companies.) 

Should I switch to a new electricity supplier? 

Warning: Alternative suppliers purchase power in the same electricity market – so they will also charge higher prices.

However, it doesn’t hurt to inquire if your community has negotiated a “municipal aggregation” or “community power” deal with an alternative supplier at a lower rate than ComEd’s price. Just make sure to find out what the true price of the offer is, and when it expires. (Municipal aggregation is when community leaders negotiate with an alternative supplier to try to secure an electricity price that is lower or comparable to the utility price.)

If you also want to consider other alternative supplier deals–beyond community aggregation–we advise you to be cautious. Be careful about getting lured into a long-term bad deal that is pitched to you over the phone, via mail or from a door-to-door sales representative. A company may offer a low introductory rate that will skyrocket after a short period. (Before signing up, ask how long a rate lasts and what the new rate will be after the current price expires.) Also, be wary of add-on fees that can raise the cost of the plan. Finally, be careful of multi-year deals. ComEd’s price will eventually come down so you don’t want to get locked into a long-term deal that goes sour a year or two into it.