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Q&A: Updates to the Carbon-free Resource Adjustment

CUB has been getting calls about a line-item on ComEd bills called the Carbon-Free Resource Adjustment, or CFRA.  Over its first year on ComEd bills, the CFRA delivered a total of about $2.4 billion in credits to consumers. 

But this summer the CFRA became a charge. Here’s some background.

What is the Carbon-Free Resource Adjustment (CFRA)?
The Carbon-Free Resource Adjustment (CFRA) was created by a provision in the 2021 Climate and Equitable Jobs Act , or CEJA, groundbreaking energy legislation in Illinois. 

The CFRA was meant to give a subsidy over five years to Illinois nuclear power plants (Bryon, Dresden and Braidwood) to support lower-cost carbon-free energy when market prices were below a certain level.

CEJA also requires nuclear plant owners to pay consumers in the form of a bill credit if whole energy prices skyrocketed above a certain level. The idea was that if energy prices were high, the nuclear plants would earn more and wouldn’t need the extra subsidy. That led to the CFRA being a credit over most of the past year. 

The CFRA, which is in effect through 2027, appears as a per-kilowatt-hour charge or credit on bills.

How has the CFRA appeared on bills?
Due to a spike in natural gas prices and the Russian invasion of Ukraine, among other causes, market electricity prices skyrocketed in the summer of 2022, when the CFRA was first put on customer bills. That made the CFRA a per-kWh credit–totaling an average of about $18-25 a month through May of 2023, depending on an individual customer’s usage.  According to a ComEd filing with the Illinois Commerce Commission (ICC), here’s what the CFRA has looked like since 2022:

  • Credit: 4.306 cents per kilowatt hour (¢/kWh) from June through September 2022.
  • Credit: 4.115 ¢/kWh in October and November of 2022.
  • Credit: 2.384¢/kWh from December 2022 through February 2023.
  • Credit: 0.033¢/kWh from March through May 2023.
  • Charge: 1.241¢/kWh beginning in June through September.
  • Charge: 1.092¢/kWh beginning Oct. 1.
  • Charge: 1.354¢/kWh beginning Nov. 1.
  • Charge: 1.562¢/kWh beginning Dec. 1. 
  • Charge: 1.608¢/kWh beginning Jan. 1.
  • Charge: 1.612¢/kWh beginning Feb. 1.
  • Charge: 2.060¢/kWh beginning March 1. 

Note: The CFRA began to be updated monthly in October 2023, ComEd says, “to further align the credits or charges with payments to or from nuclear plants.”

Why did the CFRA drop so drastically and then become a charge?

A complex mix of factors—including the drop in energy prices, the timing of power purchases and ComEd’s overestimation of the credits–combined to first lower the credit and then, as of June 1, make it a charge.

ComEd based the amount of the credit on forward market prices, which turned out to be too high, causing the utility to overestimate the amount of the credit in the first year by about $1.1 billion. As of June 1, 2023, the company has been recovering the overestimation from customers, plus 5 percent interest. But remember that the total credit last year was $2.4 billion–so even after the utility collects the $1.1 billion, the credit will still have given customers a net $1.3 billion benefit. 

Will the CFRA credit come back?
It depends on the market. If energy prices skyrocket again, the credit will come back.

What if I use solar panels?
If you have solar panels, you likely benefit from net metering. This means that if your panels generate more power than you actually use, you get credits on your bill. (ComEd will only charge you for the net amount of electricity you use.)

According to ComEd, the “CFRA credit or charge for net metering customers is the reverse of what it is for other customers.” So, if standard customers receive a credit, net metering customers receive a charge, and vice-versa. This has to do with the fact that solar customers are generating their own power. 

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. A CUB review of community solar offers in ComEd territory found that all promised savings for consumers, compared with 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.)