By Shane Daniels posted @ChicagoBusiness.com
“(Crain’s) — First, the good news: Electricity rates charged by Commonwealth Edison Co. will fall this coming summer due to a temporary reduction in delivery rates and lower power prices.
Now, the bad news: Once “non-summer” energy prices resume in October, ComEd’s rates will climb significantly and by next January, when delivery fees resume increasing under the state’s recently enacted “smart grid” law, the utility’s rates will be about 9 percent higher than they are today.
That would lift today’s average monthly household electric bill of $82.44 by about $7.
The outcome is a man-bites-dog story for the utility industry, where power prices — and electricity rates — almost always are costlier during the high-demand air-conditioning season than during the rest of the year. Blame a wave of suburbs departing ComEd for lower-priced suppliers on behalf of their residents, as well as a decision by state policymakers five years ago to lock in a growing percentage of ComEd’s demand at prevailing prices at the time, when energy costs were nearly double what they are now.
The strange result means that non-summer energy costs paid by ComEd customers will be 11 percent higher from October 2011 until June 2012 than they are now despite wholesale power prices that have continued falling from already low levels in recent months. From June through September, though, those energy costs will be 13 percent lower than they were during the same period last year and 10 percent less than they are now.
The cost of energy typically accounts for about two-thirds of an electric bill, the remainder being the cost of delivering the kilowatts.
“It is very unusual,” said Arlene Juracek, acting director of the Illinois Power Agency, which negotiates power-purchase deals on behalf of utility customers statewide.
The decline in power demand has meant that high-priced ComEd contracts that the state negotiated with parent Exelon Corp. five years ago in a bid to stabilize long-term rates at a time when energy costs were thought to be rising in the future will account for the vast majority of the energy price ratepayers shoulder when the summer ends.
In her most recent power procurement, approved earlier this month by the Illinois Commerce Commission, Ms. Juracek said, “We didn’t buy anything for the non-summer months.”
In a statement, ComEd said that its rates essentially will even out over the year beginning in June. “Summer supply rates go down because of lower capacity prices,” the utility said. “Non-summer rates increase because of lower expected volume. The net effect on customers is neutral.”
But many customers, particularly lower-income households, don’t bank the savings from lower electricity rates at one point in the year to pay higher rates in a different time of the year.
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May 14th, 2012 
Adam 
