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Electric Rate-Relief Bill Creates Rate Uncertainty for Illinois BusinessesThe following is important information for business customers of ComEd electric in Illinois. If you spent over $2,500 for electricity in any one of the past 12 months, this could affect you. The price of electric supply for Illinois businesses has significantly increased since the beginning of 2007. Recent action by the Illinois legislature may result in even higher costs for this essential commodity. The Electric Rate-Relief Bill recently passed by the Illinois legislature contains a significant provision that may impact your cost of electricity in 2008 and beyond. All non-residential customers buying their power from ComEd, and using over 400 kw of power per month, will be switched to hourly, market-based pricing no later than May 2008. All non-residential customers buying their power from ComEd, and using over 100 kw of power per month, will be switched to hourly, market-based pricing no later than May 2010. The Illinois Commerce Commission approved this change on October 11, 2007. The net effect is that ComEd is shifting the risk of buying electricity from themselves to their non-residential customer just as soon as possible. Many businesses being served by ComEd will be subject to this switch. We encourage you to review your electric bills to see how you could be affected.
Business customers that buy their power from ComEd now do so at a fixed rate per kilowatt hour of usage (plus additional delivery charges). A benefit of this is that you are able to anticipate the cost of the power you use. Budgets can be established, with forecasts of expected costs that are reasonably accurate and with minimal risk factors to consider. Now that Illinois has a fully deregulated electric market, businesses can also shop for their electric supply from a number of competitive suppliers. You choose the supplier of your choice and enter into a contract term that is typically a year or more. Such contracts can offer significantly lower prices, and predictable costs. However, they should be based on your actual usage patterns and the future requirements of your business, or your costs may actually be higher. Businesses can also elect to continue buying their electricity directly from ComEd. But the ComEd switch to market-based prices could allow your costs to rise unexpectedly. Such pricing can be affected by many variables, including weather, competitive markets, fuel costs, geopolitical issues and other factors that result in significant uncertainty as to how much you will pay. Major increases in the cost of your electricity could occur next summer. Businesses that are not on supply contracts will face increased costs if the market price for electricity goes up. If market prices rise, so will your costs. If that happens, electric supply contracts from alternate suppliers would also be much more expensive. Such increases could be dramatic and have a significant impact to the bottom line. We at TDI would recommend that most businesses investigate the benefits of electric supply contracts. Be proactive and do everything you can to avoid costly surprises in your electric bills. |
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