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Mid-America Interpool Network (MAIN)
WHOLESALE TRENDS

Prices in the Mid-America Interpool Network (MAIN) have been rising gradually over the last five years, punctuated by some high price spikes in the summers of 1998 and 1999. These spikes were significant, but short-term -- a reaction to record-breaking demand during a period when supply was tight. In 1999, two weeks of hot temperatures in late July led to all-time high demand for electricity, which was reflected in the spike in the electricity markets. Chicago experienced several blackouts that summer, but they were tied to distribution equipment failure rather than insufficient generation capacity.

Wholesale Energy Prices

ILLINOIS BILLS

In Illinois, all commercial and industrial customers had access to competitive suppliers as of January 1, 2001. Residential customers will be able to choose a power supplier starting in May 2002. Price caps will be in place in Illinois until December 2004, and until that point the risk of price fluctuations will be borne by the electric utilities -- a situation similar to California. However, the utilities can enter into various risk management arrangements (such as longer-term contracts) not possible in California, so the ultimate effect on the consumer will not be clear for several years.

This is a gas bill, not an electric bill. Over a one-year period, between 1999 to 2000, the total natural gas cost for this Wilmette, Ill., customer nearly doubled. His total bill for November to December of 1999 was $110.24 compared to $246.78 in 2000. The cost per Therm in 1999 was .3501 and then went up to .6933. As in much of California, utility rate increases are being felt more in gas bills than in electric bills at this time. In fact, as part of the deregulation legislation enacted in Illinois, residential customers received rate reductions of about 15 percent in 1998 and will likely get further reductions in 2002. Once price caps are lifted at the end of 2004, residential rates will be set by the market. So the effects are not likely to be felt at homes before then.




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For more information, the Department of Energy offers a fact sheet on electricity retail rates and more details on restructuring activity in Illinois.


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