Shopping around for the best electricity price guarantees you the greatest savings, right? Not anymore in Illinois, says the Citizens Utility Board.
The non-profit watchdog group says that energy efficiency now offers greater savings potential than ditching the local utility in favor of lower-priced electricity offered by a competitive supplier.
This wasn’t always the case. In the early days of market deregulation, Illinois consumers could achieve significant savings just by shopping for their electricity provider, according to analysis released this week by the board, “Tipping Point: A Shifting Electricity Market and Illinois’ Best Bet for Savings.”
“While there are still opportunities to save through electricity competition, shopping for an alternative supplier has become more of a gamble in Illinois,” said David Kolata, CUB executive director.
Customers of Commonwealth Edison, which serves about 70 percent of Illinois population, have been able to leave the utility and buy power from a competitive retail company since 2010. Customers achieved significant savings early on because Commonwealth Edison’s electric rates were relatively high. The utility was locked into wholesale contracts that elevated its power price above market prices, the report said.
“However, Illinoisans now face an entirely new power market—and the savings that marked the early history of Illinois competition have now shrunk significantly or disappeared.
Meanwhile, energy efficiency remains a blue chip investment in this volatile price environment,” said the report. “Simple no-cost changes in the way we use our household appliances, combined with the addition of low-cost technologies to curb power consumption, are proven money-saving strategies that have emerged as the reliable hedge against rising electricity costs.”
Savings offered by alternative suppliers have either shrunk or disappeared since ComEd’s higher priced power contracts expired in June 2013, according to CUB.
Market prices are likely to only get higher this June, the report said, because of an increase in capacity costs — fees to ensure that power plants produce enough electricity when demand is highest.
The average price offered to individual consumers by retail suppliers in ComEd’s territory rose 23 percent, from about 6.7 cents/kWh in May 2013 to about 8.2 cents/kWh on Feb. 25, 2015. Meanwhile, ComEd’s ‘price to compare’ is about 7.6 cents/kWh through May, according to CUB,
On the other hand, the Cub Energy Saver program, which gives homes customized money-saving plans, has cut electricity waste by an average of nearly four percent, according to CUB. If all 3.48 million ComEd residential customers participated in the program, total annual savings could reach about $153 million, CUB said.
Of course, competitive retail suppliers see the market value of energy efficiency too. Nationwide, several of these companies have added sophisticated energy savings programs and technologies to complement their electricity supply products.
The full CUB report is here.