Reader’s Perspective: Carbon-Mitigation Credits Positively Impact ComEd Customers

Crain’s article on the carbon mitigation credits (CMCs), which our customers received, contained inaccurate information. The headline claims that ComEd customers will be asked to return the entire amount of credits plus interest they received, which is false. I’ll come back to it.

The Illinois Climate & Equitable Jobs Act established the CMCs in order to sustain carbon-free nucleo plants when energy costs are too low for them to be sustained. When energy prices are high, plant owners will pay utility customers. When prices increased last year, customers received an average $25 credit in June, July and August.

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The credit amount is determined by the forward market price. Credits are reconciled later when the actual energy prices are known. The forward market was high last year and the credits that resulted were too large. This is the way that the program operates. The program uses the same forwards that are used by the Illinois Power Authority, the Illinois Commerce Commission and other agencies to evaluate bids for energy procurement. The ICC reviewed and approved the interest and reconciliation process in an open, non-discriminatory manner.

Crain’s claim, that CMCs represent a profitable opportunity for ComEd, is simply false. ComEd gave $2.4 billion in bill credits over this period, but we only received $1.3 billion back from the nuclear plants. From June to December 2022, we financed the remaining balance for which ComEd did not receive any interest or repayment. ComEd suffered a loss on the cost of financing this balance.

In 2023, the ICC will set the interest rate at 5%. This is not an “adder.” Our cost of financing will still be higher than 5%. ComEd is projected to finance a $1.1 billion average balance from January 2023 through May 2023 at a cost around $30 million. We will only collect about $20 million.

It’s good to know that CMCs saved their customers $1.3 billion. That was the fair and just outcome.

Crain’s did not include these facts, even though we had provided them to Crain. This left readers in the dark about our efforts to offer customers the best value possible and the lowest total bill rates across the country.