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Avoiding 2014 ComEd increases

August 1, 2014
By Tom Jankowiak, Utility Management Group
When choosing an electric supplier other than Commonwealth Edison, that supplier bills you not only for your electricity used, but also for a number of ComEd- or state-mandated charges. The largest of those charges generally is the capacity charge. 
The primary driver behind the capacity charge is the spikes in your usage; the greater your spikes, the higher your capacity charge. It changes every June, and after being relatively low for the past two years it increased about 340 percent this year. While there is no way to avoid this increase, there are three ways to minimize its impact.
1. Historically, suppliers have offered pricing based on individual customer profiles, so your capacity charge was specific to your account. One of the changes we’ve seen is suppliers offering pricing based on pooled capacity charges. 
Customers at the upper end of that spectrum, which includes many auto dealerships, can benefit greatly from this program as the pool average often is lower than your individual capacity charge. When pricing accounts, we obtain both custom quotes and pooled quotes to confirm which option offers the greatest benefits. 
2. If you’re utilizing older lighting or HVAC systems, you can benefit from upgrading those systems. Utilities currently offer rebates to help offset those costs, and the return on the upgrades can be as quick as 18 months. The most important things to consider when reviewing quotes are the quality of the equipment and the accuracy of the analysis, including the cost of electricity and number of hours the lighting or equipment is used in calculating the ROI. If either of those two numbers used are greater than your actual numbers, the realized ROI will be longer than what was quoted.
3. Your capacity charges are calculated by measuring the spikes in your usage on the five days during the year when electric usage is at its highest, generally during the summer months. ComEd does not disclose which five days will be used. There are, however, organizations that notify you when they believe those days will be called, allowing you the opportunity to reduce your usage on those days and therefore lowering your capacity charge for the following year. This service is not an exact science, but the more experienced organizations are fairly accurate. 
The average dealer’s annual electric usage being significant, so even minor changes to your usage or rate can translate to thousands of dollars in annual savings. Analysis of the above mentioned programs will allow you to confirm that you’re maximizing your energy savings, takes little time and is risk free.
Changes to Supplier Offerings
As previously mentioned, the supplier you select charges you not only for the cost of electricity, but also for a number of ComEd electric-related pass-through charges. Since no two suppliers now bill those pass-through charges the same, we recommend asking for all-inclusive pricing, as that’s the only way to receive a true rate comparison. Under a true all-inclusive rate, all energy-related charges are rolled into a single rate. When comparing offers, it’s important to confirm that all charges are included, as not all suppliers include all costs in their quoted rate. 
The charges that should be included are energy, capacity, transmission, RPS, line loss, ancillary and both supplier and broker margins. This is not an issue if the supplier discloses the fact that it is not including all charges and it provides its total costs. It becomes an issue only when suppliers pull charges out of a quoted rate that should be all-inclusive and does not disclose that. Depending on the cost omitted, additional charges of $.001 to $.005 per kwh may be added to your total cost. A dealer using 1 million kwh annually will incur $1,000 to $5,000 in unexpected charges.
For more detailed information on the above options or changes, please contact our office at (630) 279-0117.