How Energy Deregulation in Illinois Succeeded

In case you haven’t heard, Star Energy Partners recently expanded our services into Illinois! This was made possible by the fact that Illinois is one of the many states across the country that has energy deregulation laws. These laws are what make it possible to find you the best electricity rates and increase your home’s energy efficiency.

Taking a look from 1995 to today, let’s see how deregulated energy has been successful in Illinois:

What is energy deregulation?

In a regulated energy market, energy consumers only have one option when it comes to receiving their power—there is no agency and no choices. However, in a deregulated energy system, consumers are afforded the ability to choose their energy provider. The result is competition among energy companies that want to appeal to as many energy consumers as possible, which ultimately drives down the overall price of electricity in those areas.

Illinois’s history of energy deregulation

Energy deregulation in Illinois began in 1995, when Illinois Power Co. president and CEO Larry D. Habb told his colleagues during a meeting that the state should embrace energy deregulation to pave the way for energy savings in Illinois. It took a few years for the political wheels to begin moving, but they wouldn’t be stopped after their slow start.

In 1997, the Prarie State saw the creation of the Illinois Electric Service Customer Choice and Rate Relief Law. This law deregulated Ameren Illinois Utilities (AIU) and Commonwealth Edison Co. (ComEd), the state’s two biggest monopolies. This law also gave large commercial bodies the ability to purchase electricity the way you can in deregulated states today, but it did not yet provide this benefit to small businesses or residents.

The next 10 years marked a mandatory transition period, changing how electricity production was sold. Residents were finally permitted to purchase electricity in May of 2002, but high rate caps on electricity prices discouraged most retail electric suppliers from serving residential customers.

This all changed in 2006, when the Retail Electric Competition Act was passed by the general assembly, which removed barriers to competition among retail electricity suppliers. It also gave residential customers an incentive to purchase electricity from these retailers with temporary, fixed-discount programs.

There was a scare in 2007, as the lifting of energy price caps resulted in prices soaring, which was greeted with a great deal of criticism and skepticism. However, the passing of the Illinois Power Agency Act and the creation of the Illinois Power Agency (not to mention $1 billion in new electricity rate relief) eased these concerns.

Thanks to a 2008 pilot program, the first residential customers left their utilities and switch to a retail electricity supplier! Residential adoption of retail suppliers rose slowly, but eventually hit its stride in 2011.

In 2015, Star Energy Partners expanded its service territory to include Illinois, giving consumers greater choice and control over their energy costs and impact on the environment. The rest, you might say, is history!

Click here to learn more about the benefits of energy deregulation!