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Smart grid law rate hikes to total $382 million

Friday, Dec 12, 2014 - Posted by Rich Miller

* AP

The Illinois Commerce Commission has approved rate increases for the state’s two main electric utilities.

The commission this week authorized an 11 percent overall raise for ComEd and 17.4 percent overall raise for Ameren Illinois… The amount customers will pay depends on different factors, including their location and how much electricity they use, commission officials said. The increases will affect delivery charges or how much consumers pay to have electricity delivered. […]

The commission approved the increases after reviewing the utilities’ expenditures over the last year, officials said. The new rates were set using a formula created by a state law that allows utilities to recover costs for specific investments in infrastructure, such as smart meter and smart grid technology.

* The Citizens Utility Board, which is in general support of the smart grid, was shocked at the amount…

“Today, ComEd and Ameren received a total of about $382 million in rate hikes (reportedly $245 million for ComEd and about $137 million for Ameren). CUB is disappointed in these increases, especially as they will hit consumers in the heart of what could be another expensive winter. Illinois’ new way of setting electric rates—by formula—limits how much consumer advocates and regulators can reduce proposed increases. CUB does plan to file petitions for rehearing to lower the increases as much as possible. However, our focus is also on holding ComEd and Ameren accountable and pushing them to live up to their promise of building a better power grid that maximizes consumer benefits. Illinois consumers deserve to see results.”

Background:

    • These rate hikes take effect in January 2015. CUB is still crunching numbers to determine how this will impact individual bills. The increases affect delivery charges—what customers pay to have the electricity delivered to their homes. Those charges take up about a third to a half of the bill. The rest of the bill is taken up by the cost of the electricity itself. That supply rate is determined through a power-buying process managed by the Illinois Power Agency (IPA), a state agency, or by an alternative supplier, if a customer is with one.

    • Since this increase involves delivery rates, all customers will pay the higher rates—even those with an alternative supplier.

    • The delivery increases are in accordance with passage of the 2011 “Energy Infrastructure and Modernization Act,” or the “smart-grid bill.” The new law uses a formula to determine ComEd and Ameren rates annually for the next several years to pay for about $3.2 billion in system upgrades.

    • ComEd’s initial rate-hike request was about $275 million and Ameren’s was about $206 million. Both companies filed the requests last April.

       

12 Comments
  1. - PublicServant - Friday, Dec 12, 14 @ 9:51 am:

    Can’t talk now. Gotta buy me some ComEd stock. Be right back…


  2. - Abe the Babe - Friday, Dec 12, 14 @ 9:51 am:

    And thats just one year.

    Whats the rate of return for all those utility lobbyists? I’m guessing north of 1000%


  3. - Wordslinger - Friday, Dec 12, 14 @ 9:52 am:

    Never bet against the utilities. They have the money to buy the clout.


  4. - Arizona Bob - Friday, Dec 12, 14 @ 10:08 am:

    This smart grid bill was one of the biggest ripoffs in Illinois utility history.

    The purpose of this was simple, and not in the best interest of the consumer.

    One of the biggest areas of “revenue enhancement” that the utilities wanted to expand was the ability to overcharge individual consumers during peak demand times. They can’t do it using the current metering systems.

    Once this system is up and running, the utilities will be able to charge you ridiculous amounts at times when you really need the power, like at 3 pm on July 17 when cooling loads are highest for the year. They can also jack up the prices during peak heating times.

    Industrial users already have this technology, but they’re able to set up deals and affect their use schedules to minimize costs. Families sweltering in the middle of summer afternoons won’t care about the price, they’ll use the AC and get gouged for doing it.

    Here’s how this price gouging will be sold to the general public:

    1) Nukes are “base loading” sources of electricity, they always put out about the same power. “Peaking” units may be oil fired or gas turbines, and generally have power generation costs much higher than base loading nukes. Since the marginal costs for meeting the peaks will be higher, or need to be purchased from the grid, the price with substantial mark up wil now be able to enacted using the “smart grid” technology.

    2) This will be sold as a “conservation” increase to provide disincentive to using power during peak hours. Of course they know that individual users typically won’t manage for this after years of just paying thier utility bills.

    There’s a lot more insidious about this. The technology is there to “talk” to your appliances and HVAC systems to establish the times of day you’re in your house, have the AC turned on, are using your stove or watching TV. They’ll know your power use habits, and will increase rates for the times they know you’re unlikley to conserve.

    This will alos give information to utilities for times they can give “brownouts” and “blackouts” to individual users should the utilites decide to drive up prices by limiting demand by not replacing the nukes when they reach the end of their economic life, even while nuke life extension is economically feasible.

    Illinoisans were sold down the river on this one folks. Look for the damage to come in 5…4…3…2….1….

    If you really wanted to conserve, you give tax CREDITS for installing heating and cooling conrol in house


  5. - Sunshine - Friday, Dec 12, 14 @ 10:28 am:

    Moving up my plans for solar!


  6. - Anon. - Friday, Dec 12, 14 @ 11:14 am:

    You can thank Senator Don Harmon for the rate increases.


  7. - Pat C - Friday, Dec 12, 14 @ 11:41 am:

    And so the Krampus carries Gov. Quinn off into irrelevance land. The irony of this happening when he’s in office is tremendous.


  8. - sss - Friday, Dec 12, 14 @ 11:52 am:

    So much tinfoil there Arizona Bob, you might need another roll.

    I think the flaw in your theory is that we are already paying for those high-price peak hours. Its called the purchased energy adjustment, and it gets dolled out to everyone each month based on how much we all are using during those unexpected peaks.

    So if I more efficient in my home, I am subsidizing your three- refrigerator running, 100 Watt bulb installing, leave door opening rear.

    Give me my money back.


  9. - foster brooks - Friday, Dec 12, 14 @ 11:55 am:

    Good to be an Edison shareholder. ..just dump it on the ratepayers,thanks Illinois general Assembly. Btw anyone received their smart meter yet? I’ve been paying on it for several years now what a scam.


  10. - sss - Friday, Dec 12, 14 @ 12:19 pm:

    I should also mention that we pay for those peak hours through our regular rate as well (not just the PEA). But again, those costs are just put into am average rate.


  11. - A guy... - Friday, Dec 12, 14 @ 12:32 pm:

    That Grid is smarter than anyone thought it would be.


  12. - Tight with a Buck - Friday, Dec 12, 14 @ 2:28 pm:

    It’s back to reading by candelight for me.


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