Electric rates to rise due to inflated price at capacity auction

[August 31, 2024] By Jim Talamonti | The Center Square

(The Center Square) – ComEd customers can expect another round of energy cost inflation next summer.

The Citizens Utility Board (CUB) said a record price spike at an electricity capacity auction means the supply price for Commonwealth Edison will likely increase significantly in June 2025.  

CUB Communications Director Jim Chilsen said the way grid operator PJM Interconnection runs the capacity auction is stacked against the consumers.

“We pay higher bills for more capacity than we actually need, and the generators made out like like bandits,” Chilsen said.

Chilsen offered a rough estimate of how much more customers might pay.

“What we’re looking at is about 1.5 cents per kilowatt hour to 2 cents per kilowatt hour increase in ComEd’s supply price,” Chilsen said.

CUB estimated that a customer who uses 500 kilowatts of electricity a month would pay about $7.50 to $10 extra each month from June 1, 2025, through May 31, 2026.

ComEd raised metering, administrative and distribution facilities charges on Jan. 1 this year.

CUB said the capacity auction spike does not affect Ameren customers. Both Ameren and ComEd sought record rate hikes in 2023.

CUB said when power grid operator PJM Interconnection announced the results of its Base Residual Auction for June 2025 through May 2026, capacity prices jumped 830%.

Chilsen said the capacity price is about a 20% chunk of the supply price for most ComEd customers.

“That does not mean our supply price is going up 800%. The capacity price is just a portion of the supply rate,” Chilsen explained.

Chilsen said this was a preventable problem for PJM.

“Its policies favor generators to the detriment of everyday consumers like you and me, and now we’re going to pay the price. We hope that this motivates PJM to change its ways,” Chilsen said.

CUB recommended several reforms for PJM: speeding up the interconnection queue, implementing long-term transition planning, improving load forecasting, and implementing state reforms.

Chilsen said ComEd is not making money off the price spike but will pass on the cost to customers with no markup.

“We are concerned that alternative electricity suppliers will go door to door and use this news to try to lure people into bad deals. We’ve talked often over the years about how going with an alternative supplier is a gamble that you’re likely to lose. There’s a lot of bad deals out there,” Chilsen said.

Chilsen said everybody should know that alternative energy suppliers will be also impacted by the capacity-auction price change.