Advertiser Disclosure: At ElectricityRates.com, our number one goal is to help you make better energy decisions. We adhere to strict editorial guidelines, however this post may include references to products offered from our partners.
Competition in the deregulated Illinois electricity market saved the state's 12.9 million residents an estimated $92 million to $218 million last year alone. Despite the savings, the state's participating retail electricity providers have received an overall grade of "incomplete" from the Illinois Citizens Utility Board (CUB), a non-profit, non-partisan organization whose mission is to represent the interests of Illinois residential utility customers.
Illinois' largest utility, ComEd, has been contractually locked-in to higher than market prices almost 3 cents per kilowatt hour over the next largest utility, Ameren's rates. Much of the savings was attributed to ComEd customers participating in electric supply choice either by community aggregation agreements or by residents and businesses shopping around individually for a retail electricity provider that offers lower rates than the ComEd utility.
"Incomplete" Not Attributed to All Providers
The grade of "incomplete" stems from a few concerns regarding retail electricity providers operating in the state: misleading or inaccurate marketing and sales, lack of innovation, and the possibility that many providers won't be able to offer lower rates when ComEd's pricing goes down scheduled in June.
Illinois residents are encouraged to educate themselves on industry best practices as well as to read their contract plans carefully before signing. For example, some retail electricity provider plans are similar to promotions offered by internet, phone, and cable providers in which one rate is offered to start, and then a price increase is implemented after a certain period. Much of the despair experienced by many dissatisfied shopping customers could have been avoided by simply reading contract terms carefully.
Of course, the "incomplete" rating is for all combined retail electricity providers, and not all have done so poorly. Furthermore, the most successful retail electricity providers in the near future will be those that can implement the most transparent pricing plans as well as to continue to provide rates below those of ComEd.
As far as "lack of innovation", we believe that the residential electric choice market in Illinois is a bit too young to create tremendous innovation. While the state officially became deregulated in the late 1990s, the residential and small business market did not open until almost a decade later, only a few years ago. Congruent with the purpose of electricity deregulation, we expect that more innovative products and services will come about as the market continues to mature. About 1.7 million residential customers in Illinois have switched since 2010, and 2012 saw the greatest increase in electric choice participation, with a 562% increase. This growth trend is not expected to reverse anytime soon, as greater competition in the market is projected to stabilize pricing and result in more innovative products and services.
Research When Shopping Around
Illinois residents are still encouraged to shop around, but ComEd customers may want to wait until ComEd releases its new 2013 rates, which will be implemented in June. Here at ElectricityRates.com, we are constantly monitoring the market and will keep you up-to-date on ComEd's rate changes.
Residents and business can realize substantial cost savings by switching to a retail electricity provider, but should also educate themselves on what to look for in a reliable, top-notch provider. You can refer to these questions to ask retail electricity providers before switching to make sure that you're making the best choice for you.