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Chicago’s ComEd Seeking Four-Year Electricity Rate Increase to Bolster Electric Grid
Commonwealth Edison Co. (ComEd) has filed to raise monthly electricity rates by about $4.25 for the average monthly residential electricity bill annually from 2024-2027 as it strengthens the grid and prepares for increased electrification.
The Chicago-based Exelon Corp. subsidiary noted that its electricity utility customers currently see an average bill of $93/month, about 20% lower when compared with the 10 largest U.S. metropolitan areas. If approved, ComEd customers by 2027 would see a total increase of $17/month on their bills.
The proposed investments into the grid and combined costs of regular operations is estimated to raise ComEd’s net revenue requirement from $3.76 billion in 2024 to $4.35 billion by 2027, according to the company’s petition to the Illinois Commerce Commission (ICC).
“ComEd has a critical role in ensuring the transition to cleaner energy is reliable and equitable for all,” said ComEd CEO Gil Quiniones.
The utility’s grid plan aligns with its recently announced ComEd 2030 targets, which include supporting up to 1.8 million electric vehicles (EV) added to the grid, hardening the grid against increasing weather and security threats, and integrating distributed energy resources (DER) to serve 400,000 customers, all while ensuring technology maintains efficiency while minimizing customer costs.
ComEd’s 2030 plan also seeks to provide up to $1 billion in cumulative energy assistance programs for its customers.
“These proposed investments are necessary to deliver the resilient 24/7 power our customers depend on, prepare the grid for fleets of EVs and electrification, integrate more clean energy and battery storage, and equitably advance a decarbonized energy future,” Quinones said.
Throughout 2022, ComEd said it received almost 20,000 applications from residential, commercial and industrial customer segments to connect solar panels to the grid, nearly 75% more applications compared with 2021. The utility has estimated solar additions may increase from 500 MW to 2,700 MW by 2030.
ComEd’s grid plan would also seek to upgrade power lines and substations to meet increased electric demand while integrating more renewable DERs.
Additionally, ComEd said its plan would help it achieve requirements set under the state’s Climate and Equitable Jobs Act (CEJA), which requires the power sector to phase out fossil fuel-related generation by 2045. The law also requires Illinois’ electricity planning and procurement agency to double the state’s investment in renewable energy in order to meet a net-zero greenhouse gas emission target by 2050.
The investment plan is subject to ICC-approved performance metrics that set targets for grid performance and equity, ComEd noted. Key metrics would ensure grid reliability, as well as reduce the peak electric demand on the grid, the amount of residential customer disconnections and the time it takes to connect DERs.
The utility also noted that since it initiated smart grid improvements, ComEd has increased its reliability by more than 80%, avoiding outages for more than 19 million customers and saving about $3.3 billion in outage-related costs.
The Citizens Utility Board (CUB), a nonprofit formed by the Illinois General Assembly to represent the interests of residential utility customers, called the $1.5 billion rate hike “terrible news” and noted it would challenge the increase as it passes through the ICC.
“CUB will do a thorough review, but it’s immediately clear that the utility giant wants an excessive profit rate for shareholders. That’s why we will join with other consumer advocates to fight it. We will scrutinize ComEd’s filing to challenge every penny the company can’t justify. Making strategically smart, consumer-friendly grid improvements can help save customers money in the long-run, but that shouldn’t mean ComEd gets an excessive profit rate for shareholders,” CUB said in a statement.
According to CUB, delivery rates would rise by $894 million in year one alone, making it ComEd’s highest single-year increase in its history. If approved, rates would then rise by about $198 million/year through 2027, taking ComEd’s return on equity (ROE) to shareholders from 10.5% to 10.65% by 2027, CUB noted.
The consumer advocacy group noted that while investments for system improvement can be beneficial to customers, “that doesn’t mean the company should get an excessive profit rate for shareholders. That’s why CUB and other consumer advocates will be involved in these rate cases to reduce the ROE and the hikes as much as possible.”
An ICC decision on new rates is expected in December 2023, according to ComEd.
As the largest electric utility in Illinois with 90,000 miles of power lines, ComEd provides electricity and natural gas services to more than nine million people.
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