Electricity prices in Illinois likely to increase
Electricity prices are likely going up in Illinois according to Mark Pruitt an energy consultant and former Director of the Illinois Power Agency. Pruitt says current prices are unsustainable. “Market participants will change how they operate in order to improve profitability,” he says.
“In July, Exelon Corp. announced that it would purchase Integrys Energy Services – one of its primary retail electricity supply competitors. The strategy behind the acquisition is to reduce overhead costs and improve profitability.”
Other suppliers like First Energy Solutions have announced they are leaving the Illinois market. Pruitt says, “Press accounts indicate that FirstEnergy was pricing electricity deals at less than cost and could not absorb ongoing losses.”
Similar pressures are being experienced by some power plant owners remarks Pruitt. “In March, Exelon Corp. announced that three of its Illinois-based nuclear power plants — Byron, Clinton and Quad Cities — were at risk of shutting down due to their lack of profitability.” Exelon’s CEO Chris Crane said that without sustainable profits the nuclear plants would have to be shut down to avoid long-term losses. The Illinois legislature will likely consider legislation to address proposed nuclear plant closings. Nuclear plants supply 48 percent of the power for Illinois compared to 19 percent for the U.S. as a whole.
“My sense is that the value of cooperative membership will become more evident over the next several months as other consumers in Illinois realize higher prices due to fewer viable retail electricity suppliers and they could potentially absorb new surcharges to support the nuclear plants,” Pruitt says. “I also believe the transparent and cost-based pricing used by cooperatives could help ensure cooperatives do not find themselves in the same difficult financial strai