New electricity choice laws in Illinois merit clarification

Between the recent implementation of electricity deregulation and the ongoing battle of the smart grid, many Illinois residents have become confused by their electricity bills. A. J. Goldsmith of Gazebo News clarifies what the recent changes have meant to Illinois customers.

Many of the state's residents have had only one electricity supplier their entire lives and those have been the same as their utilities, whether that is Commonwealth Edison or Ameren.

But the Illinois Commerce Commission decided that these utility companies could not prevent residents from purchasing power from alternate electricity providers. Utilities are given a monopoly in their areas over transmission, but this does not give them the right to a monopoly over generation. Rather, utilities are then required to transmit power from any electricity provider that residents choose to purchase from.

While many residents have always seen their electricity bills as a single unit, Goldsmith explains that the total bill is actually split between the power itself, transmission costs and taxes.

With residents now having the ability to switch electricity providers, they can easily reduce the first expense. In May, residents could save more than 10 percent with a one- or two-year contract with another provider.

The price hike associated with the new smart grid bill would be attached to the second expense.

Already, Plug In Illinois reports that more than 178,000 Illinois residents have switched electricity providers as of the end of October.