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We want to express our deep concern with Commonwealth Edisons (ComEd) proposal to impose
demand charges on household electricity bills as part of their proposed energy legislation SB 1585.
Under this plan, all electricity utilities would, for the very first time, be allowed to add a demand charge
to household electricity bills. This is a radical departure from how customers have paid for electricity
since the inception of the industry more than a century ago. In fact, no other state legislature has ever
approved a demand charge on residential customers.
What is a demand charge? A residential demand charge, like the one ComEd wants to impose, will
charge customers a fee for the entire month based on a short time period during which they use the
most electricity. Turning on your dryer, toaster, and microwave at the wrong time will significantly
increase your bill. Demand charges are hard to understand and hard to control. They will make it
impossible for consumers to control their electricity bills.
For many citizens of Illinois, electricity bills are significant portions of their expenses, and demand
charges may significantly increase these already expensive bills. The burden will be even greater if you
live pay check to pay check or on a fixed income. A single hours careless electricity use can cause an
unexpected bill spike that puts energy or other essential expenditures out of reach. In addition, the
charges negate the bill savings that customers could see from either saving energy through energy
efficiency or conservation measures or investing in renewable energy systems for their homes.
A recent white paper from five leading utility experts, including former Illinois Commerce Commissioner
John T. Colgan, concluded that demand charges tend to overcharge the smallest utility customers for
electricity service, hitting apartment dwellers particularly hard. The paper also warns that demand
charges are confusing for customers and difficult for customers to predict and manage. 1
While some other utilities across the country are considering changes in rate design to meet the future
needs of the electricity grid, no state has given blanket approval to this kind of charge. Significant
analysis is needed to determine how such a fundamental change will impact customers, and ComEds
proposal to shift to this new way of collecting fees without the benefit of pilot projects or a full
regulatory proceeding to assess its impacts on households is reckless and unnecessary.
Illinois customers - especially low-income communities of seniors, immigrants, or diverse neighborhoods
- should not be subject to a largely untested new electricity rate policy, with these potentially difficult
consequences for households. Furthermore, ComEd has not demonstrated that it has a need for an
additional charge.
We agree with Attorney General Madigan who was quoted as saying, By subjecting consumers to
demand rates, ComEds proposal could unfairly allow consumers to be charged more for using less.
Chernick et al., Charge Without a Cause? Assessing Electric Utility Demand Charges on Small Customers, (July 18,
2016).
ComEds untested proposal would take away control and predictability in consumers bills and should be
rejected.
We urge you to join us and others in rejecting this component of the companys proposed legislation SB
1585.
Sincerely,