Electricity rates are changing for both residential and commercial customers across Illinois. Driven by flawed capacity auctions, increased demand, and delayed energy reforms, the recent ComEd rate hikes are expected to impact customers for years to come. Understanding the reasons behind these changes and the actions being taken is essential for anyone looking to manage rising energy costs.
PJM Interconnection is the regional transmission organization that coordinates the flow of wholesale electricity across parts of 13 states, including Illinois. It manages the high-voltage electricity grid to ensure reliability and oversees electricity markets where utilities like ComEd secure power for their customers. PJM plays a critical role in determining capacity prices, which directly affects what residential and commercial customers pay for electricity.
The recent surge in electricity rates is tied to several factors within the PJM-managed system. Flawed capacity auctions led to significantly higher prices. PJM and the Federal Energy Regulatory Commission (FERC) acknowledged that the auction rules were flawed and have since revised them for future auctions. However, the damage from the last auction has already affected customers. Over-reliance on fossil fuel plants contributed to supply instability, especially as PJM limited supply from unreliable plants that experienced outages during extreme weather events. Additionally, the growth in power demand, fueled by energy-intensive data centers, strained supply further. PJM’s delays in implementing reforms and clearing the interconnection queue for new clean energy projects also played a role. As a result, customers face significant price increases without the full benefit of newer, more reliable renewable energy sources.
As of January 1st, 2025, ComEd Supply went down from 6.612 cents to 6.552 cents. However, the delivery rates, including the Standard Metering Charge, IL Electricity Distribution Charge, Monthly Customer Charge, and the Distribution Facilities Charge, went up.
ComEd customers will see noticeable increases beginning in June 2025. According to ComEd, supply prices are estimated to rise by approximately 1.5 to 2.0 cents per kilowatt-hour. For the average residential customer using 500 kWh per month, this translates to an additional $7.50 to $10.00 on monthly bills. Larger households or businesses consuming around 1000 kWh per month could see their bills climb from $141.40 to between $155.40 and $161.40, representing a 10% to 15% increase. Commercial customers face an even steeper impact, with total electric bills expected to rise by 28% to 30% due to the sharp jump in capacity prices.
Commercial customers face an even steeper impact, with total electric bills expected to rise by 28% to 30% due to the sharp jump in capacity prices.
For customers on hourly pricing programs, the multiplier used to calculate capacity charges will also increase, resulting in higher bills based on peak load usage. These rate hikes are not merely short-term fluctuations but are expected to stay in place through at least May 2028, locking customers into higher costs for years.
Attorney General Kwame Raoul filed a complaint urging that the flawed PJM auction be rerun under newly approved, fairer rules. Raoul argued that rerunning the auction could potentially cut the scheduled capacity price increases by nearly half. PJM and FERC admitted the auction rules were problematic and have since changed them for upcoming auctions, but the call for a reauction aims to retroactively lessen the burden on current consumers.
Despite these efforts, there is no guarantee that relief will come in time to prevent substantial rate increases from affecting monthly budgets across Illinois.
With the certainty of higher electricity prices looming, there has never been a better time to consider installing solar energy systems. Even the Citizens Utility Board noted that now may be an opportune moment to move forward with solar installation.
Solar energy offers both residential and commercial customers a way to stabilize long-term energy costs, reduce reliance on volatile utility markets, and contribute to a cleaner, more sustainable energy grid. By investing in solar power now, customers can shield themselves from future rate hikes while benefiting from the environmental and financial advantages of renewable energy.
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