'Beyond our control': Electricity savings program getting expensive this winter

News-DemocratFebruary 17, 2014 

The bitter cold conditions that have gripped the metro-east this winter will leave their mark when the next utility bill arrives.

Some customers already know what awaits them. Ameren Illinois customers such as Cheryl Weir are anticipating the worst after seeing their hourly electricity costs spike several times over the past few weeks amid severe cold temperatures.

The Belleville resident is one of almost 14,000 Ameren Illinois customers who participate in Power Smart Pricing, a program administered by Elevate Energy in Chicago since 2007. This program allows residential customers to track their hourly electricity usage online and conserve energy during peak hours as opposed to customers who are charged a flat rate that is same the price every hour during a billing period.

Weir has been with the program since 2009 and estimates that she has saved about $500 in that time. However, soon after the year's first snow storm dumped several inches of snow and has at times pushed temperatures below zero, Weir noticed her hourly rates jumped exponentially.

"It's never been like this before," Weir said.

Elevate Energy spokeswoman Emily Robinson said the program's recent large sway in hourly electric rates comes as colder than normal temperatures have led to higher demand.

"I know when people are seeing prices double and triple, it's alarming," Robinson said. "We are alarmed, too, but it's beyond our control. We don't set the price for electricity. All we can do is try to help people conserve the best they can. We understand the heartache around it. A lot of us are on the program as well and we're facing that as well. It's difficult. We understand people's frustration."

Participants pay $2.25 a month to enroll in the program. Ameren Illinois installs a special meter at Power Smart customers' homes that notifies participants of hourly, wholesale electricity prices. They are warned via email the day before prices are expected to spike above 13 cents a kilowatt hour. According to the program's website, www.powersmartpricing.org, this service has saved more than $9.2 million for participants.

According to the National Weather Service, almost 11 inches fell in St. Louis on Jan. 5. According to the Power Smart Pricing website, the highest cost for electricity reached 5.4 cents per kilowatt hour between 5 and 6 p.m. that day.

By the next day, the rate jumped to as high as 7.5 cents per kilowatt hour between 5 and 6 p.m. The day after, Jan. 7, the price jumped again to 10.5 cents per kilowatt hour in that same hour. The rate went up again, on Jan. 8, to 10.9 cents per kilowatt from 7 to 8 a.m.

The worst came late last month. On Jan. 27, Power Smart Pricing customers paid 20.8 cents per kilowatt hour between 6 and 7 p.m. The day after, the cost reached 34.2 cents per kilowatt hour form 6 to 7 p.m.

Weir said these hourly rates exceed what she paid when recent heat waves pushed metro-east temperatures beyond 100 degrees.

"Even two summers ago when we had high temperatures, 105, 106 degrees for day and day on end we didn't see those prices," Weir said. "In the wintertime, they are usually fairly flat in the 3s, around 2.5 cents per kilowatt hour, somewhere around there. In wintertime during the week, three, four hours we were getting in the 2.5 cents per kilowatt hour to 2.6 cents per kilowatt hour."

David Becker, Elevate Energy director of dynamic pricing, said the majority of customers have been understanding about the recent price spike and recognize the savings they have received in the past and will continue to reap in the future.

"They look at the program they have had long-term success," Becker said. "That's been really nice to keep people in this. This is one day or two days, not the whole year. Prices will return to normal savings in the program."

Weir has since sent letters to Ameren and the Illinois Commerce Commission questioning the sudden rate hikes. She has recently received letters back from the utility provider and the ICC that both state that the issue is out of their control because the electricity prices reflect supply and demand.

"I think that is just ridiculous," she said. "There is absolutely no reason for that."

A spokesman from an Illinois consumer advocacy group says the recent cost hikes are not price gouging, but a consequence of near-record low temperatures. Jim Chilsen, of the Citizens Utility Board in Chicago, said many consumers across the state have contacted the board concerned about their electricity costs.

"I think in particular this month we've seen an increase in energy prices and this is coming from extreme weather," Chilsen said. "We've seen and heard concerns from consumers worried about what the polar vortex will do to their utility bills."

Eight out of 10 Illinois homes are heated with natural gas. Usually electricity prices are highest in the middle of a hot summer day when air conditioners are being used.

But Chilsen said for those on the Power Smart Pricing program or a similar one called Residential Real-Time Pricing provided by Commonwealth Edison customers in the Chicago area and in Northern Illinois, participants pay the wholesale market price for electricity that changes by the hour. Usually, that price fluctuates between 2 cents and 13 cents per kilowatt hour, depending on demand.

On Jan. 28, Chilsen posted on his blog that although most Illinoisans are heating their homes with natural gas, they have also been using more electricity as many have been cooped up in their homes using portable heaters, electric furnaces and watching TV. In turn, the cold weather drove up natural gas prices and made it more expensive to operate natural-gas fired power plants that produce the electricity.

Ameren is installing about 780,000 advanced electric meters in customer homes and businesses over the next six years. These advanced meters allow for fast, two-way electronic communication with Ameren Illinois.

Becker said these smart meters will be able to notify participants of hourly, wholesale electricity prices through the Power Smart Pricing program. He said that despite the recent price surge, current Power Smart Pricing customers can expect further electricity savings this year.

"We're still looking for positive savings into the spring in 2014," Becker said. "It's just off to a rough start."

Contact reporter Will Buss at wbuss@bnd.com or 239-2526.

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