When you’re looking to compare electricity prices, it’s essential to first understand the price of electricity supplied by your utility. This baseline cost is a crucial point of comparison when considering different electricity providers.
In Illinois, the process for determining this utility electric supply price is managed by the Illinois Power Agency (IPA). Established in 2007 by the Illinois General Assembly, the IPA is an independent government agency responsible for developing and overseeing the electric supply procurement process for customers of Ameren Illinois and ComEd. The IPA’s role is to direct these utilities to secure wholesale electric supply contracts from various sources, ensuring a consistent power supply.
The utilities, Ameren Illinois and ComEd, purchase electricity supply for customers who haven’t chosen an Alternative Retail Electric Supplier (ARES). These purchases, administered by the IPA and approved by the Illinois Commerce Commission (ICC), typically occur twice a year – in the spring and fall. This schedule allows for adjustments based on market conditions, and the ICC retains the flexibility to approve electricity purchases at different times throughout the year if needed.
Crucially, the price you see on your monthly bill for electric supply from Ameren Illinois or ComEd reflects the cost the utility paid, without any added markup or profit. This charge is directly passed through to customers based on their monthly electricity consumption. On your Ameren Illinois bill, this is listed as “Purch Elec,” and on your ComEd bill, it’s shown as “Electricity Supply Charge.” These charges represent the core cost of the electricity you’ve used.
For customers seeking more dynamic pricing options, both Ameren Illinois and ComEd offer real-time pricing programs. In these programs, the electric supply rates fluctuate hourly, reflecting the real-time market price of electricity. Similar to the standard utility supply price, these real-time rates are also passed through to customers at cost, varying based on when the electricity is consumed. Understanding these variable rates can be beneficial when you Compare Price options and adjust your energy usage accordingly.
To fully understand your electricity expenses and effectively compare price options, it’s helpful to recognize the components of your utility bill. Generally, your bill is divided into three main sections:
- Electric Supply: This section covers the cost of the electricity itself, which we’ve discussed as being determined through the IPA procurement process.
- Transmission Service: These are the charges associated with transporting electricity from power generation sources to your local distribution network.
- Distribution Service: This part of your bill covers the cost of delivering electricity from the local distribution system directly to your home or business.
In conclusion, when you compare price options for electricity, especially when considering alternative suppliers, understanding the utility’s electric supply price is a vital first step. It provides a transparent baseline reflecting the actual cost of electricity procurement in Illinois, managed by the IPA and passed through to consumers by Ameren Illinois and ComEd without markup. By understanding how these charges appear on your bill and the different components that make up your total electricity cost, you can make more informed decisions when evaluating and comparing electricity prices.
