New Corporate Tax Breaks Likely Will Lower Your Electric Bill
The good news for ComEd customers in Kane County is that your electric bills are likely to go down, thanks to the corporate tax breaks that will go into effect this year.
The double dose of good news for rural Kane County folks taking part in the county’s Electric Aggregation Program is that this reduced ComEd delivery rate will also apply to your bill — and your electric supply rate will CONTINUE TO BE be lower than ComEd’s.
Here’s how it works:
The Federal Tax Cuts and Jobs Act passed in December 2017 reduced the corporate tax rate from 35 percent to 21 percent effective January 2018. This provides ComEd, owned by Exelon (NYSE: EXC), with about $200 million in tax savings. On Jan. 5, 2018, the utility filed a request with the Illinois Commerce Commission for approval to pass along that savings to its customers.
The expected pass-through could begin in the first quarter of 2018, and would provide a cost reduction to the average residential customer of $2 to $3 per month. However, that is offset by a recently-approved delivery rate increase of $1, for a net savings to the average residential customer of $1 to $2 a month, or $12 to $24 per year.
An electric bill contains both delivery and supply charges. The tax-break pass-through affects the delivery portion of the electric bill.
Supply prices (for those who receive the default ComEd supply rate) are set twice each year by the Illinois Power Agency. Because of increased capacity costs, the ComEd supply rate is expected to increase in June 2018. Ratepayers participating in a municipality’s Electric Aggregation program receive a fixed supply rate for a fixed term.
Kane County’s Electric Aggregation program rate is 7.08¢ through August 2018, versus the current default ComEd rate of 7.2¢. The default ComEd will rise in June.
Following deregulation of electric supply in Illinois, which was initiated in the 1990s, ComEd no longer generates power, but simply delivers power, maintaining wires and networking stations. Therefore, ComEd only retains fees for the delivery portion of a ratepayer’s electric bill. It is the delivery portion of the average customer’s bill that will decline due to the drop in the corporate tax rate.
Kane County began its electric aggregation program in 2015, offering residents in unincorporated areas access to the lower rates available through bulk purchasing. Residents in those areas are enrolled in the program unless they choose to opt out.
For questions, please contact Kane County’s Electric Aggregation Consultant, NIMEC (the Northern Illinois Municipal Electric Collaborative) at 800-727-3820.
For more information on Kane County’s Electric Aggregation program, please visit the Division of Environmental and Water Resources’ webpage.
SOURCE: Kane County Division of Environmental and Water Resources