Ameren Illinois customers can expect to see a slight drop in their electricity rates beginning in June.
An electricity capacity auction conducted by the Midwest Independent System Operator yielded improved electricity supply prices for Ameren Illinois when compared to last year’s results.
Wholesales prices cleared the auction at $72 per megawatt day, which is less than half of the $150-per-megawatt-day price for southern and central Illinois after last year’s auction.
MISO, which operates the electricity grid in all or parts of 15 states, including southern and central Illinois, is responsible for holding annual energy capacity auctions that determine how much Ameren Illinois and other utilities pay.
The wholesale prices, which were recently released, are set to be in place for a year, beginning June 1.
$1.75 The estimated savings per month the typical Ameren Illinois residential electricity customer can expect to see.
Last year, when the capacity price increased by nine times over the previous year, bills increased by $131 over the course of the year for the typical residential electricity customer, according to the Illinois attorney general’s office, which filed a complaint with the Federal Energy Regulatory Commission.
The wholesale price after last year’s auction was also 42 times higher for southern and central Illinois than other MISO territories.
Marceyln Love, a spokeswoman for Ameren Illinois, said the company estimates typical residential customer who uses about 10,000 kilowatt-hours of electricity a year would see bills be about $1.75 less per month.
More definitive estimates won’t be finalized until the Illinois Power Agency completes its procurement process, which is in a matter of weeks, Love said.
According to Ameren Illinois, the results of the capacity auction will only affect those who use the electricty supply through the utility, and not those who are part of municipal aggregation programs or have individual contracts with third-party suppliers.
Love reiterated the capacity auction results only apply to those who receive their electricity supply from Ameren, and doesn’t apply to people participating in municipal aggregation programs or to people who have third-party electricity supply contracts.
Ameren Illinois passes along the supply costs directly to customers without any markup, Love said.
The wholesale price for southern and central Illinois also is the same for other MISO zones including Iowa, the eastern Missouri, most of Michigan, and most of Indiana.
“This year’s capacity planning auction resulted in a much more equitable distribution of charges for customers in the MISO footprint,” said Richard Mark, president of Ameren Illinois. “While we continue to support the efforts of MISO and its stakeholders to strike the right balance between the cost of capacity and the reliability for which it brings, we’re pleased that our efforts to intervene on behalf of Ameren Illinois customers resulted in a fairer auction and cost savings for energy consumers this year.”
The electric utility also estimates customers could see a decrease in January as well. The company is going through a Illinois Commerce Commission review on its delivery rate request for 2017. The company has asked for $14 million less for next year’s delivery charges.
The capacity auction, run by MISO, helps ensure there is enough electricity available on peak days of usage, such as on the hottest days during the summer.
Andy Schonert, a spokesman for MISO, said changes to auction rules helped lead to the lower wholesale prices.
Schonert said the amount of energy required to come from within Illinois was lowered, and the amount that could come from other sources outside the state was increased. This helped allow more suppliers into the market.
“There’s more generation across the footprint to pull from rather than what was located in Illinois,” Schonert said.
There also was a much lower threshold for when prices offered by suppliers would have to be reviewed by the MISO independent market manager.
There’s more generation across the footprint to pull from rather than what was located in Illinois.
Andy Schonert, spokesman for the Midwest Independent System Operator
Any price above $26 per megawatt-day had to be reviewed. Last year, the threshold for a review was $180.53, Schonert said.
The market manager makes sure the prices are fair and competitive, the auction was properly administered, and guards against conduct that would distort the market, Schonert said.
Schonert added MISO is continuing conversations with various stakeholders across Illinois to address concerns about capacity prices.