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A Primer on What Illinois Consumers Need to Know About Their Options; Electricity Deregulation

Warrenville, IL – July 6, 2011 – With ComEd, “smart meters” and the Illinois energy bill dominating local headlines in recent weeks, the topic of affordable energy is being discussed by consumers across Chicagoland and the state. To help bring clarity on the issue, offer definition around consumer options, and discuss the factors leading to the broad range of electricity rates, EverBright Energy has assembled the facts, helping Illinois residents and small businesses research the best options for taking advantage of competitively priced energy.

Fact 1: The Illinois Energy Bill Will Increase the Price of Electricity for Consumers

Approved by the State General Assembly on May 31, 2011, the energy bill (known as the “Smart Grid” bill) awaits final approval by Governor Quinn, which he has indicated will not happen in its current form. The bill would allow ComEd and Ameren to begin its plan of implementing a more efficient electricity infrastructure via sophisticated, smart-grid technology and the installation of “smart meters”. The bill calls for Illinois residents to help pay for this initiative via average rate increases of $3.00/month for each consumer for the next 10 years. The bill also would allow ComEd to lock-in its profit margin at 10.25 percent during this time and allow for rate increase reviews every eight months versus the annual rate reviews it currently conducts with the Illinois Commerce Commission. The bill is expected to be presented to Governor Quinn in the next 60 days.

For consumers, there are two key considerations; the rising cost of electricity and the implementation of upgraded systems that can help individuals become more knowledgeable and efficient about their electricity use. The bill in its current form would impact both.

Fact 2: Electricity Deregulation Can Decrease the Price of Electricity for Consumers

Deregulation of the electricity industry and the subsequent passing of laws in December 2010 paved the way for utility companies to carry the names of alternative electricity suppliers on their monthly bills. This created an opportunity for more alternative electricity suppliers to enter the Illinois market. The price advantage these suppliers have over the traditional utility companies is flexibility in determining when and how much electricity they purchase. Alternative suppliers can buy when prices are low and can purchase as much or as little energy as they choose. Traditional utilities, overseen by state governments, are required to purchase electricity at certain times throughout the year, and in certain quantities, ensuring they have adequate supply for all constituents, which creates other difficult factors to consider besides price. This often results in the traditional utilities paying more for their electricity; the cost is then passed on to the consumer.  By law, ComEd or Ameren cannot profit on the sale of electricity; they profit from the delivery, which is the service they provide to consumers. Alternative suppliers can profit from the sale of electricity, therefore are motivated to purchase it at the lowest prices, and can pass savings onto consumers, while still factoring in their profit margin.

The electricity supplied through alternative providers is still passed through a consumer’s current utility provider – ComEd or Ameren - for delivery into individual homes or businesses using existing meters and wires. For customers, this means no new setup is required, no disruptions to existing service. Consumers still receive a single bill from their existing utility. The only change is that the new supplier’s name will be shown for the energy supply portion of the bill and the usage rates will reflect new pricing.

Fact 3: Alternative Energy Providers Offer Options, but Vary on Price, Service

A surge of alternative electricity suppliers and providers have hit the Illinois marketplace with differing methods of supplying and reselling electricity. It is important for consumers to evaluate the offerings of each company, gaining an understanding of rate components and potential savings on electricity. Cost comparison calculators are available through some providers; each will also have their own contract terms and possible early termination fees.

Consumers may also benefit from knowing that alternatives electricity marketers have been embraced locally and in other states across the country. Here are some facts:

  • More than 21,000 ComEd consumers have switched to an alternative electricity provider as of May 2011
  • More than 15 states have passed similar energy deregulation programs
  • Some states such as Texas have completely abandoned the traditional utility as an energy source with all consumers purchasing their electricity from alternative suppliers
  • More than 20 Million residential customers in the United States are using alternative energy suppliers

Additional Resources for More Information

Illinois residents and small businesses looking for more information on their electricity supply options and / or deregulation laws can visit the following websites.

“The Illinois electricity marketplace is going through a significant change which may be creating some confusion among consumers about their supply options,” said John Nania, president and CEO of Nania Energy and EverBright Energy. “Unlike other markets, including Pennsylvania, where the state established a proactive educational campaign informing consumers of their switching options, Illinois has not taken that step. At EverBright Energy our goal is to fill that void. Yes, we are an electricity marketer, but nobody wins without first having an informed consumer.”

About EverBright Energy

EverBright Energy makes it easy for consumers and small businesses to understand, choose and save on their electricity. Because consumers need to be informed of their electricity options, EverBright is committed to educating the Illinois marketplace about their choices, offering transparency into the switching process. Through EverBright, consumers can calculate potential savings upfront and switching is made easy. EverBright Energy is an exclusive agent of Integrys Energy Services. By signing up through EverBright Energy, consumers agree to receive their power supply from Integrys Energy Services. To learn more about EverBright Energy, please visit www.everbrightenergy.com

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Contact:

Kevin Ritter
Director of Mass Marketing
630-416-8300 x319

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EverBright Energy Alternative Electricity Alternative Electricity Sources Illinois Consumers Electricity Deregulation affordable energy Alternative Energy Providers