Utility-backed legislation would cost consumers
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ComEd and its parent company, Exelon, have high hopes that lawmakers in Springfield will pass legislation dramatically increasing household electricity bills. Their lobbyists have descended on the state Capitol with new legislation that would cost consumers hundreds of millions of dollars.
Here are just three of the many ways that ComEd and Exelon are hoping to fleece ratepayers.
Demand charges: Most of your electricity bill is based on your consumption: the more electricity you use, the more you pay. This is easy to understand and gives consumers simple ways to save money, by using less or investing in efficiency. ComEd is proposing to change that to a “demand charge” wherein your bill is based on the one 30-minute period, over an entire month, when you use the most electricity at once (your “peak demand”).
Sound confusing? It is, and that’s a big problem for consumers.
Something as simple as turning on a hair dryer while also running your air-conditioner and washing machine could lead to a big spike in your monthly bill. Because the charge is based not based on overall consumption, two households that consume the exact same amount of energy could end up paying wildly different amounts, with average single family homes paying ComEd anywhere from $250 to $1,300 to deliver the same amount of electricity over the course of a year. Demand charges also make it harder for consumers to reduce their electricity bills through investing in energy efficiency or rooftop solar.
In a recent survey of research on the topic, experts concluded demand charges could only be counted on to secure one outcome: more reliable income for utilities.
Gold plated microgrids: One reason ComEd would like to add a new demand charge to your bill is to pay for a $300 million microgrid experiment. A microgrid is what it sounds like – a small electric grid designed to serve a small subset of customers, which can be connected to or independent from the larger power system. Microgrids may make our electricity system more resilient, and many think a pilot program is worth pursuing. But ComEd is asking for $300 million for the exclusive ability to build five microgrids, $60 million per micro-grid. By comparison, micro-grids have been built in other states through competitive bidding processes for as little as $2.7 million (California) and $100,000 (New York).
Why not put the project out to bid, and get the best deal for ratepayers?
Nuclear plants: Last is the bailout of Exelon’s nuclear power plants: Even though Exelon is turning healthy profits and its nuclear fleet in Illinois is profitable, they want to charge customers up to $300 million per year in new subsidies. Exelon is threating to close two power plants if those subsidies are not forthcoming. None of this money will guarantee jobs or help workers adapt to the changing electricity system. Rather, the money would simply support a profitable corporation’s bottom line and may give these old plants a few more years before the inevitable retirements begin.
The ComEd and Exelon legislation fails the most important test: Does it move Illinois toward the 21st century energy system our state needs?
We know the days of relying on large centralized and highly polluting power plants are coming to a close and the time is now to ramp up clean, distributed renewable energy to meet our state’s electricity needs.
Abe Scarr is director of Illinois PIRG.