ComEd Wins Approval to Test Time-Of-Use Rates Starting in 2020

The Illinois utility’s pilot program will offer three separate rates that will save money for customers who avoid peak hours. Chicago-area residents who can hold off on running dishwashers, washing machines and other energy-intensive appliances until later in the evening will have a chance to save money on their electric bills starting next...
A worker installs a smart meter.

The Illinois utility’s pilot program will offer three separate rates that will save money for customers who avoid peak hours.

Chicago-area residents who can hold off on running dishwashers, washing machines and other energy-intensive appliances until later in the evening will have a chance to save money on their electric bills starting next summer.

The Illinois Commerce Commission recently approved a time-of-use pilot program first proposed just under a year ago by ComEd, the state’s largest electric utility, which serves Chicago and the rest of northern Illinois. It’s expected to begin in June 2020 and last four years. Any ComEd residential customer with a smart meter is eligible to participate, but enrollment will be capped at 1,900 participants.

The utility already has a real-time pricing program, in which hourly electricity prices fluctuate based on wholesale prices, but uptake of that program has been low so far, with only about 26,000 — less than 1% — of the utility’s 3.5 million residential customers enrolled, according to the Citizens Utility Board, which supported the new pilot.

Consumer advocates often say time-variant rates save customers more money than traditional flat rates. By giving customers more certainty about the amount they’ll pay than the real-time program, supporters of the time-of-use pilot hope more people will be interested.

The new program will include three separate rates for different times of the day:

  • The lowest rates will occur during “off-peak” hours, from 10 p.m. to 6 a.m.
  • The highest rates will occur during “super peak” hours, from 2 p.m. to 7 p.m.
  • Customers will pay a “peak” rate in between the other two during the other hours of the day.

Prices during the peak and off-peak hours will be “significantly below” prices under the traditional flat rate, said David Kolata, executive director of the Citizens Utility Board. While rates haven’t been determined yet, they’ll be based on historical wholesale prices during these hours.

The time-of-use pilot offers customers an opportunity to save money, especially if they shift their usage away from super peak hours, Kolata said. The goal of the program is to reduce peak demand, since those busy hours of the day are when electricity is most expensive and often comes from the highest-polluting power plants.

The main criticism of the program during docket proceedings came from the Illinois attorney general’s office, where officials argued that because it hasn’t been tested, the program should exclude low-income customers, who could face difficulties if bills end up higher than under traditional flat rates.

The Citizens Utility Board and Environmental Defense Fund proposed reimbursing low-income customers who end up paying more under the new program. But the commission rejected that proposal, deciding instead that with thorough marketing and education from ComEd, low-income customers can avoid risk and still participate.

Kolata said he expects low-income customers to benefit. A study by the Citizens Utility Board earlier this year found those customers tend to use less electricity than most customers, especially during peak hours, so they could save on their bills with the lower rates during off-peak hours without risking a spike during peak hours.

The Illinois Commerce Commission also recently approved a new pilot to encourage participation in ComEd’s real-time pricing program.

Planned to begin next spring, ComEd in the new program will notify 30,000 customers who pay the traditional fixed rate that they would have saved on the hourly pricing program the previous year. A group of about 700 of those customers will then have the opportunity to try real-time pricing with a bill-protection guarantee: If, at the end of the year, they end up paying more under real-time pricing than they would have with the fixed rate, ComEd will refund them the full amount.

Both of the new programs are “really innovative,” Kolata said, with the potential to benefit all of the utility’s residential customers.

Source: energynews.us