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.
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
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