The Story of Energy Deregulation in Illinois

In 1995, Larry Habb, the president and chief executive officer of Illinois Power Co., proposed the idea that Illinois should have energy deregulation to give consumers a choice and save money and energy. At this time, Illinois customers were paying some of the highest electric rates in the nation for service and supply. 

Two years after that electricity policy meeting, the state implemented energy deregulation but encountered some problems. When the Illinois Electric Service Customer Choice and Rate Relief Law was initially passed, residential and small business customers could not purchase their electricity from Alternative Retail Electronic Suppliers (ARES). They were forced to get their supply directly from the utilities. 

The Illinois Commerce Commission then took action to address the lack of residential service from ARES. To help protect the residents and small businesses in the state, the commission reduced the price of electricity in Illinois by up to 20 percent. The rate was frozen for ten years and known as the “Mandatory Transition Period,” and was intended to make up for these customers’ lack of electrical supply choice.

Illinois Energy Choice Today

In 2002, residents were finally granted the opportunity to choose an electric company to provide their energy needs. But because of the rate cap for residents, many ARES were reluctant to serve residents. Once the ten-year rate cap expired in 2007, electrical rates in the state soared, leading to the General Assembly of Illinois passing the Illinois Power Agency Act, a $1 billion relief package for customers. 

Today, there are over 52 ARES, or electricity retailers, registered in Illinois. Energy choice and competition has led to Illinois customers enjoying some of the lowest energy rates in the country

Quick Facts about Energy in Illinois

  • Midwestern Regional Greenhouse Gas Reduction Accord Member: Illinois is part of a regional agreement with six other American governors and the Premier of Manitoba, Canada, whose aim is to reduce greenhouse gas.
  • Nation’s top nuclear generator: Illinois is home to six nuclear power plants with 11 reactors total. They are also responsible for 13% of the country’s nuclear power.
  • No special gasoline. Unlike other deregulated states, Illinois does not require residents to use a special mix of gasoline. However, Chicago and the St. Louis metropolitan require their residents to use a special gas mixed with ethanol.
  • Does not impose fuel economy standards for vehicles. States like California regulate new vehicles to ensure that they are not puffing out toxic gas into the air. Illinois does not implement this law.

Energy Choices in Illinois

Some Illinois counties and municipalities may opt for the aggregation of the electrical load in the region, as per Section 1-92 of the Illinois Power Agency Act. Municipalities can negotiate with energy providers on behalf of all eligible small businesses and residential customers. Aggregation creates a larger buying group, which can lower electrical prices. It may also allow communities to select a higher percentage of “green” power from specific providers. 

Aggregate electrical supply isn’t the only choice for Illinois customers. Those in the Ameren Illinois and ComEd service areas, including aggregate and non-aggregate choices. Residents may choose to participate in the aggregate plan or select their own, including a Real-Time Pricing Program.

Illinois has three main plan choices for residential electrical customers: 

Map of US Energy Deregulation

Illinois is one of 26 US States that have some form of energy deregulation whether it be electricity, natural gas or both. Use our interactive map to get more information on deregulated energy states in America.

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