It Pays to Know Your Electric Supplier
by Michelle Knox, ISEA Board Member and daughter, Mikella Marley
Henry Wallace said, “In an effort to eliminate the possibility of any rival growing up, some monopolists would sacrifice democracy itself.” Fortunately, one of government’s roles is to preserve democratic rights, and Illinois took strides to dissolve a perceived monopoly by deregulating the electricity market.
Illinois’ journey to electricity deregulation began before many citizens may realize. Over a decade ago, in 1997, state legislators passed the Illinois Electric Service Customer Choice and Rate Relief Law. These measures deregulated Illinois’ public utility providers (Ameren Illinois Utilities and Commonwealth Edison Co.), and presented customers with the option to procure electricity from approved Alternative Retail Energy Suppliers (ARES).
Residential customers remained unaffected by these actions until 2006, when the General Assembly passed the Retail Electric Competition Act. This act promoted temporary, fixed-discount programs. It took several years for ARES to gain popularity with residential customers, lured by substantially lower rates than those offered by Ameren and ComEd since their rate caps had expired.
What many customers failed to realize was the transient nature of these enticing rates; as the temporary incentives expire, residential consumers have found themselves saddled with bills heftier than those they were attempting to escape by resorting to ARES in the first place.
As a personal example, I converted from a public utility to an ARES in July of 2010 at a substantially lower rate. In 2012, the fleeting period during which I paid this reduced rate expired, and I began noticing gradual increases in my electric bill. Upon further investigation, it became apparent that reinstating my business with my public utility provider would actually save me a considerable amount of money (a reduction from $.1199/kWh to $.04657/kWh).
It’s worth noting the glaring irony of this deregulated marketundefinedpatrons resorted to ARES in an attempt to abscond from the financial confines of Illinois’ high public utility rates, only to ultimately find those very companies may now be offering the most competitive rates due to new procurement contracts they have entered into that allow them to purchase wholesale electricity at a less expensive rate and pass that savings on to consumers.
Before being blinded by sequins in your eyes skillfully placed in your field of vision by electricity providers in the form of dazzlingly low rates, take care to not only research that provider, but also gain a thorough understanding of your contract terms before you are locked into an agreement that will do anything but financially behoove you.
Of course, there’s always the renewable energy option! Despite an obligatory flat rate “supply” fee applied to each month’s electric bill for all grid-tied customers, regardless of supplier and proportionate to usage (typically ranging from $30-70), renewable energy can help to offset this fluctuating market by allowing the system owner to supply all or a portion of their own power at a fixed cost over the lifetime of their system.
About Michelle Knox
Michelle is the founder and owner of WindSolarUSA, Inc., a turn-key renewable energy company located in Central Illinois, and a founding partner of American Solar Designs based out of Memphis, TN. She began research and development of WSU in September of 2008 with a goal of helping the residential, commercial, and agricultural markets to invest in their own clean energy future while attaining a desired level of self-sufficiency. Michelle received her training through the Midwest Renewable Energy Association in Custer, WI and is a Certified Site Assessor for both solar photovoltaics and solar thermal and has completed all phases of wind training. Prior to pursuing her renewable energy career, she was the Development Director (fundraiser/grant writer) for a private, east-side elementary school in Springfield and a Montessori teacher of 6-9-year-olds. Michelle is an advocate and promoter of renewable education and hopes to use her teaching and fundraising skills to further the advancement of the solar market statewide through her role on the board of the ISEA.