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As Illinois looks to prepare its electric grid for the future, a new voluntary program in the Chicago area promises to lower costs for both customers and the utility system as a whole.
ComEd is finalizing plans to roll out time-of-use rates in 2026 following a four-year pilot program in which participants saved money and reduced peak demand between 6.5% and 9.7% each summer.
Under a plan before state utility regulators, customers who sign up would pay a much steeper energy-delivery charge during afternoon and early evening hours but see a significant discount overnight. The goal is to shift use to hours when the grid tends to be less congested as well as deliver cleaner and cheaper power.
“What we saw from the pilot was people did change their habits,” said Eric DeBellis, general counsel for the Citizens Utility Board, the state’s main utility watchdog.
Most standard customers are set to pay an energy-delivery charge of 5.9 cents per kilowatt-hour next year, while customers who enroll under ComEd’s proposed time-of-use program would pay a “super peak” delivery rate of 10.7 cents per kilowatt-hour between 1 p.m. and 7 p.m. but just 3 cents during overnight hours.
“The key to savings will be customers limiting usage from 1 pm to 7 pm,” John Leick, ComEd’s senior manager of retail rates, said in an email.
Under the proposal, most time-of-use rate customers would pay delivery rates of around 4 cents per kilowatt-hour during the morning, from 6 a.m. to 1 p.m., and in the evening between 7 p.m. and 9 p.m.
The details were approved in January by the Illinois Commerce Commission but put on hold last Thursday after commissioners agreed to consider a request by ComEd to also incorporate energy-supply charges into the program. (The initial proposal included only the portion of customers’ bills that pays for the delivery of energy but not the cost of electricity itself.)
The Citizens Utility Board is happy with the plan approved in January, DeBellis said, and it wants to ensure a delivery-only option remains for customers who buy power from alternative retail electric suppliers since these customers would not be able to participate in a supply-charge ComEd program. The utility watchdog also would have liked the “super peak” hours to be a bit shorter.
“For your typical upper-Midwest household, about half of their electricity is HVAC, and in the summer bills go up because of air conditioning,” DeBellis explained. “We were worried about the hours of super peak, the length of time we’re asking people to let the temperature drift up.”
The prospect of limiting air conditioning on hot afternoons could dissuade people from enrolling in the program, DeBellis continued. “Since each person’s subtle behavior changes are going to be small, it needs to be really popular to have an impact,” he said.
Consumer advocates have long asked for time-of-use rates, which are considered crucial as Illinois moves toward its goal of 1 million electric vehicles by 2030. If too many EVs charge during high energy-demand times, the grid could be in trouble.
“We want EVs to be good for the grid, not bad,” said DeBellis.
People with electric vehicles will save an extra $2 on their monthly energy bill per vehicle just by enrolling in the proposed ComEd time-of-use program, with a cap of two vehicles for up to two years.
“This will help incentivize customers with EV’s to sign up and pay attention to the rate design and hopefully charge in the overnight or lower priced periods,” said Leick.
Richard McCann, a consultant who testified before regulators on behalf of the Citizens Utility Board and the Environmental Defense Fund, recommended that in order to qualify for rebates for level 2 chargers, customers must participate in the new time-of-use program or other programs related to when electricity is used.
DeBellis and his wife recently bought an EV, and he thinks time-of-use prices could be an extra incentive for others to follow suit. However, he thinks dealers and buyers are more focused on EVs “being cool” and tax incentives toward the lease or purchase price, rather than fuel savings.
“I don’t have the impression people trying to buy a car are doing the math and thinking about how much they would save on fuel” with an EV, he said. “Time-variant pricing makes those savings even more, but the math is kind of impenetrable for most people. In my humble opinion, fuel savings should be a way bigger factor, and time-of-use rates should be part of it.”
ComEd crafted the time-of-use program after a four-year pilot and a public comment process overseen by state regulators. The pilot was focused on the energy supply part of the bill, but DeBellis noted that the lessons apply to any time-of-use program, since demand peaks are the same regardless of which part of the bill one looks at.
The pilot program’s final annual report showed that both EV owners and people who did not own EVs significantly reduced energy use during “super peak” hours in the summer. Even though participants without EVs did little load-shifting during the non-summer seasons, they still saved an average of $6 per month during the last eight months of the pilot because of the way electricity was priced in the program. EV owners saved significantly more, with most cutting bills by $10 to $30 per month and some saving over $70 per month from October 2023 to May 2024.
Overall, in the pilot’s final year, energy usage did shift significantly from peak hours to night-time hours thanks to an increasing number of EV owners participating in the program.
In 2021 and 2022, participants in the pilot faced high peak-time energy rates because of market fluctuations. Some customers dropped out for this reason, Leick said, but participation remained near the cap of 1,900 residents during the pilot, with over a quarter of them being EV owners by the end.
Many utilities around the country already offer time-of-use programs: 42% of 829 utilities responding to a federal survey have such rates, according to McCann’s testimony.
ComEd’s filings with state regulators include a survey of 15 time-of-use rates established by seven other large utilities nationwide. The study found that in the first year of ComEd’s pilot program, the utility had a larger proportional difference between peak and off-peak pricing than most of the rates studied. (ComEd’s peak and off-peak rates, however, were lower than most of the others, so the total price difference was larger for other utilities.)
ComEd also saw larger reduction in summer peak-time electricity demand than many of the other time-of-use rates. ComEd’s program structure was similar to that of the other utilities, the company doing the study found, though in California, peak times were later in the afternoon, likely because of the state’s climate and proliferation of solar energy.
The program is designed to be revenue-neutral, meaning ComEd won’t earn more or less depending on when people use energy. Still, it has potential to lower costs to the system overall by helping to make more efficient use of existing infrastructure and postponing the need for new generation or transmission investments.
The new time-of-use rate would only apply only to residents. Industrial and commercial customers already have an incentive to use power at night, since their energy-delivery charge is based on their highest 30-minute spike between 9 a.m. and 6 p.m. on weekdays. If a business’ most intense energy use is after 6 p.m. or on weekends, their bill will be lower than if that same spike happened during usual business hours, Leick explained. Commercial and industrial customers’ energy-supply rates, meanwhile, are based on hourly market prices, which are typically higher during peak times.
ComEd has since 2007 offered a voluntary real-time pricing program that lets people save money if they use energy when system demand and hence market prices are lower. But keeping tabs on the market is beyond what most customers other than “energy wonks” are willing to do, DeBellis noted. Only about 1% of residential customers have enrolled in the real-time pricing program since it started, according to McCann’s testimony.
“Real-time pricing was so complicated it was basically gambling,” DeBellis said. “We’re very happy to have a time-based rate offering that’s very predictable, where people can be rewarded for establishing good habits.”
Some clean-energy groups had argued for a program that automatically enrolls residents unless they opted out. DeBellis said the Citizens Utility Board promoted the opt-in version that is currently proposed.
“We want people on this program to be aware they’re on the program, otherwise you won’t get behavior change. You’re just throwing money at random variation,” DeBellis said.
The Clean and Reliable Grid Affordability Act, introduced into the state legislature in February and backed by a coalition of advocacy groups, would mandate large utilities offer residential time-of-use rates, outlining a structure similar to what ComEd is planning. After the rates have been in place for a year, the Illinois Commerce Commission could do a study to see if the rates are indeed reducing fossil-fuel use and work with utilities to adjust if needed.
While the commission’s ruling last week reopens debate about the program’s structure, a ComEd spokesperson said the company is confident it will be available by next year.
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