Evanston residents who choose not to use Commonwealth Edison Co. as their energy provider once deregulation takes effect may pay more for their electricity.
Deregulation begins May 1 for residential customers and splits the generation and distribution of energy such that customers can choose different companies for the two services.
The Illinois Commerce Commission granted an interim order that allows ComEd to increase the rate it charges for residential distribution in northeast Illinois by 25 percent if customers use another energy provider. The new cost would not take effect until 2005 because the original deregulation legislation fixed the rates until then.
ComEd owns the distribution lines in the area, so all residents who use another provider would have to pay the increased rate. Distribution costs make up about one third of a resident’s total bill.
The rate hike was a response to ComEd’s claim that its distribution costs were more than the company would receive under the current rate. The decision is pending an audit conducted by the commission, paid for by ComEd, that investigates whether this claim is valid.
ComEd originally requested a 47 percent increase but the commission lowered it to 25 percent because the company based its claim on a year that included a lot of emergency repairs that should have been spaced over several years, said Brian Sterling, spokesman for the commission.
There are currently no other companies that compete with ComEd, so the decision would be a moot point unless others entered the market. There are other companies that provide energy to commercial customers, but Sterling speculated the residential market may not increase as fast.
“I don’t know if the profit margin is there for other companies to enter (the market),” he said.
But if other companies do compete with ComEd, some residential customers might choose them because of the power outages and overloaded circuits associated with ComEd.
Evanston also has had a history of trouble with ComEd, according to Max Rubin, the city’s director of facilities management. He cited problems with reliability over the years and said if possible, the city would shop around for other providers.
Northwestern, the largest energy user in Evanston, has had problems with the company that included four blackouts in the first month of classes Fall Quarter. When the university’s contract with ComEd expires, it might begin looking at alternative sources of energy that would reduce its dependence on ComEd, Ronald Nayler, NU’s vice president of facilities management, said in October.
“With these outages it makes sense for us to hold the future in our hands and not ComEd’s,” Nayler said.
Rubin said he thinks many people will view the situation the same way the city will. He said a rate increase for distribution would affect the city’s decision to change suppliers, but the city will still choose whatever costs less.
“The city watches its money closely,” Rubin said. “We’re not going to throw it away.”
