This is regarding columnist Dawn Turner Trice’s “ComEd rate `phase-in’ no favor to poor” (Metro, Sept. 18). I disagree with the conclusions Trice made. Electricity rates will increase on Jan. 2, 2007, but not because of the auction. Rates are rising because the cost of power, like most other goods and services in the last decade, has increased.
While other costs have been rising, however, Commonwealth Edison’s rates have been frozen and reduced, not reflecting the real cost of power.
Now that the rate freeze is ending and our supply contracts are expiring at the end of the year, our rates must reflect real costs if ComEd is going to be able to continue to provide reliable service to our customers.
What the auction assured us is that the increase reflects the lowest available market price, which will be passed to customers without markup. The auction was studied and analyzed through an 18-month process and unanimously approved by the Illinois Commerce Commission.
Even after a nine-year freeze and a 20 percent residential rate reduction, our residential rates with the 22 percent increase will still be lower than they were in 1995. And the average rates of the 10 largest metropolitan areas are 14 percent higher than ComEd’s 2007 rates.
The auction was competitive and has brought the benefits of competition to our residential customers by leveraging consumer buying power to achieve the lowest available price.
More than 20 qualified bidders started the auction process, with 16 winning the right to serve a portion of the customer base in Illinois.
The ICC has full oversight over the entire process, the authority to accept or reject the results, and an independent expert to ensure that rules are followed and no supplier has any unfair advantage.
Some people think that extending the rate freeze is the best answer to solve the question of higher rates. It’s not. In the short term, such legislation will seriously impact ComEd’s financial viability as a business and community partner.
In the long run, it will increase costs to customers. It could also force ComEd to buy power in the spot market, which could cause customers’ bills to spike quite a bit.
ComEd understands that this rate increase may be difficult for our customers. That is why we have developed a multiyear program called Customers’ Affordable Reliable Energy, which offers a host of programs and incentives to our customers.
A key part of CARE is a rate plan that allows residential customers to decide whether they want to pay the new rates all at once or phase them in over several years.
In addition our popular budget payment plan will continue to be available to customers.
CARE includes additional help for our low-income customers.
No one likes higher rates. But at ComEd we are helping our customers deal with the increase.
