Hey, Illinois consumers, how’s electricity deregulation working out for you?
Metro-east Ameren customers could see big jumps in their electricity bills this year because of a mega jump in the price of electricity capacity. But don’t blame Ameren; it just passes along that cost without a markup. Blame the auction that produced this crazy high price.
The auction is run by MISO - the Midcontinent Independent System Operator, the group that operates our electric grid. The auction rules are incredibly complex, and we don’t pretend to fully understand them. But common sense says something is amiss when last year’s auction resulted in electricity capacity costs for our zone of $16.75 per megawatt day, and now the new rate is $150 a day. Meanwhile, the other eight zones outside of Illinois got rates of $3.48 a megawatt day or even $3.29.
Those other zones all have regulated utilities, and Illinois is deregulated, so it’s not an apples-to-apples comparison. Still, a year ago the rates for our area and those other areas were for the most part the same. Why the huge divergence?
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Illinois Attorney General Lisa Madigan is working to figure it out. Did the auction rules change this year? Were they followed correctly? And why is it that most of the electricity capacity must be bought from generators in our small zone of Central and Southern Illinois? That limits bidding to just a handful of providers, which helps explain why the winning bid was sky high.
Let’s hope that Madigan can negotiate a lower rate for this year, or at least ensure that next year the auction rules change so consumers don’t get gouged again.