ComEd Cuts Ill. Retail Customer Power Rates By $125 Mln
The cuts were required by a 1997 state law that deregulated Illinois' retail electric industry to allow customer choice. Exelon Corp.'s (EXC) ComEd has made two percentage-based rate cuts since then, which combined cut 1995-level electric rates 20%, ComEd spokeswoman Tabrina Davis said.
The first 15% cut came Aug. 1, 1998, and the second 5% cut came Monday. In total, the two rate cuts should save customers $1.2 billion by the end of 2001, according to company estimates.
Retail customer electric rates will remain fixed until 2005.
According to a press release Monday from the Illinois Citizens Utility Board, a utility watchdog group that pushed for the rate decrease, the cuts bring ComEd's retail rates to a level that's about even with the national average. Before the 20% cuts, ComEd's rates were significantly higher than those seen in most other large metropolitan areas, CUB said.
"Other states have embarked on deregulation of their electric industries, but nowhere are residential consumers saving as much money as they are in Illinois," Martin Cohen, CUB's executive director, said in the release.
The 1997 Illinois deregulation law phases in customer choice by gradually allowing certain customer classes to begin choosing alternate suppliers. Commercial and industrial companies were given customer choice in October 1999. All residential customers will be eligible to choose in May 2002.
Though Illinois customers are enjoying substantially improved rates as a result of the law, Cohen said, it isn't clear yet whether there will be a significant number of switching or market penetration by competitors when full competition opens next year.
So far 22% of eligible commercial and industrial customers have switched, suggesting most customers don't see a potential for savings, CUB said.
"There is still a lot of work to be done before we have a truly competitive electricity market that will benefit all consumers," Cohen said.
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