Suffering from high electricity prices? It might be congestion

Whatever the Illinois state legislature does or doesn’t do, electric rate payers are going to see rate increases in their utility bills around now. Maybe the increases will be rescinded or not, but it will at least be a warning shot that people better do something to reduce their energy costs.

Maybe you’re already changing out your lighting and shopping for air conditioners and appliances that aren’t guzzlers. You might even be among the few with the space, wallet and desire to go with solar and/or wind power. But there’s another strategy that’s coming down the road (or wire) that doesn’t involve buying stuff. It’s something similar to what you do when you go to the movies or a restaurant, fly on a plane or stay at a hotel, or get your hair or nails done.

It’s called congestion pricing, the market force of things being more expensive when everybody wants it, and cheaper when everybody doesn’t. There will be a way for Illinois residential customers to take advantage of lower electricity prices on a market basis, and tools to avoid using electricity when’s it’s the most pricey.

The Center for Neighborhood Technology, a Chicago grass-roots research and policy organization, conducted a pilot program with ComEd called the Energy Smart Pricing Program (ESPP) where about 1 thousand rate payers went from the traditional one-size-fits-all electric rate to a variable rate that roughly matched day-ahead hourly pricing of electricity on the market. The average electricity cost for residential customers is/was just under 9 cents a kilowatt-hour (kWh), for the majority of your juice. But the hourly electricity price (HEP) in 2006 exceeded that rate only about 500 hours out of the 8,760 during the year.

Instead of the 9 cents rate, these ESPP customers pay as little as 2 cents a kWh during night time, weekends or winter. When prices were going to be high on the day-ahead market, more than 10 cents per kWh, customers would get an e-mail or text message alerting them to manage their electricity. These folks with a bit of planning would shift their routine, typically appliance use during summertime afternoon hours until later that night after temperatures, energy demand and prices cooled off. It means making sure the air conditioning was off or down, especially if you weren’t in the house, and not running laundry or the dishwasher until the 9 or 10 o’clock news was on, or maybe Letterman or The Daily Show during the summer.

On average, their electricity savings ranged 10-20 percent, saving anywhere from about $50 to more than $200 a year, a savings rate liable to increase with the higher rates. These ESPP customers reduced summer demand an average of 3-5 percent, minimizing strain on the transmission and distribution infrastructure. Peak power reduction also reduces pollution from primarily fossil-fuel sources.

Is this for you? Well, if you feel low energy costs were chiseled on the tablets at Mount Sinai and you have a right to do what you want, or simply can’t be bothered, probably no. But if you’re already in the habit of getting that steak sandwich for lunch at $8, rather than $10 for dinner, going to the 1 p.m. movie on Saturday and avoid flying on Mondays and Fridays, you may want to consider this. For more information, contact the Community Energy Cooperative at or call (773) 269-4037 to register interest in the new version of the Energy Smart Pricing Program. Up to 100,000 customers will be eligible for enrollment in the near future.

Mark Burger is president of the Illinois Solar Energy Association, a chapter of the American Solar Energy Society, and principal of Kestrel Development Company, a renewable energy consulting firm and developer of zero energy building.

From the Jan. 17-23, 2007, issue

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