How Illinois Electricity Deregulation Affects Your Monthly Bill Compared to Regulated States

What Is Illinois Electricity Deregulation and How Does It Work for Consumers?

Illinois deregulated its electricity supply market in 1997 with the passage of the Electric Service Customer Choice and Rate Relief Law. The law "unbundled" your electric bill into two distinct components: delivery and supply. Your utility — ComEd in northern Illinois, Ameren in central and southern Illinois — still owns and operates the poles, wires, and meters. That part remains regulated by the Illinois Commerce Commission (ICC).

The supply portion — the actual electrons generated at power plants — is now open to competition. Licensed companies called Alternative Retail Electric Suppliers (ARES) can compete for your business, offering rates, terms, and renewable energy options that your utility simply can't match under its regulatory constraints.

How the Two-Part Bill Works

Every Illinois electric bill includes two major cost buckets:

• Delivery charges: Fixed and regulated. These cover maintaining the grid, billing, metering, and emergency response. You cannot choose a different provider for delivery.
• Supply charges: The cost of electricity generation. This is where Illinois energy choice savings live. You can choose any ICC-licensed ARES to supply this component.

Your utility publishes a "Price to Compare" (PTC) — the benchmark supply rate. Any ARES offering a rate below the PTC puts money back in your pocket. When you switch, your utility still delivers the power and still handles outages. The only thing that changes is who supplies the electrons and at what price.

Who Can Switch in Illinois?

Virtually every ComEd and Ameren customer — residential, commercial, and industrial — can choose a supplier. There are no minimum usage requirements for residential customers. The ICC licenses over 70 ARES companies operating in Illinois as of 2025, ensuring robust competition across the state. You can verify any supplier's license status directly on the ICC's licensed suppliers list.

The Role of the Utility Doesn't Change

One of the most persistent misconceptions about deregulation is that switching suppliers means a different crew shows up when the power goes out. That's simply false. ComEd and Ameren are still responsible for every foot of wire and every transformer on your street. Reliability is completely unchanged by your supplier choice. What changes is the line item on your bill marked "supply" — and that's where the savings opportunity lives.

Illinois vs. Regulated States: A Side-by-Side Breakdown of Electricity Costs and Savings

How does Illinois stack up against fully regulated states? The answer is nuanced — and depends heavily on what you do with the deregulated option available to you.

Average Retail Electricity Rates: A State-by-State Snapshot

According to the U.S. Energy Information Administration (EIA), the national average commercial electricity rate in 2024 was approximately 12.5 cents per kWh. Here's how several states compare:

The data reveals that Illinois sits at a mid-range position compared to its neighbors. Kentucky's lower rates reflect heavy reliance on coal generation — an advantage that comes with significant carbon costs. Wisconsin's regulated rates are notably higher than Illinois's deregulated options. Indiana's regulated market also trends higher.

What Deregulation Actually Saves Illinois Consumers

The critical insight is that Illinois's headline average rate doesn't tell the whole story. The consumers benefiting most from Illinois electricity deregulation aren't paying the average — they're paying the competitive market rate, which can run 15–25% below the utility's standard Price to Compare during favorable market conditions.

A 2024 analysis by the ICC found that Illinois commercial customers who actively switched to ARES contracts saved an average of $1,800 annually on energy costs compared to remaining on default utility supply. For larger industrial users, savings routinely exceed $50,000 per year.

Regulated states like Wisconsin offer no equivalent pathway. Their customers are locked into whatever the public utility commission approves — full stop. Illinois consumers, by contrast, hold genuine pricing leverage.

When Deregulation Hurts: The Variable Rate Trap

Here's the unvarnished truth: deregulation only benefits you if you choose wisely. Consumers on variable rate plans in Illinois have sometimes paid significantly more than they would have on the utility's default rate — especially during polar vortex events and summer demand spikes. The difference between a fixed-rate contract locked in at the right time and a floating variable rate can swing $500–$1,000+ per year for a typical household.

This is why informed supplier selection — not just any switch — is the key to realizing Illinois energy choice savings. See our deep dive on Fixed vs. Variable Rate Plans in Illinois before making any decision.

How to Lower Your Monthly Electric Bill by Choosing the Right Supplier in Illinois

Choosing a supplier isn't simply about finding the lowest rate today. It requires matching your contract structure to your risk tolerance, usage patterns, and the current state of the wholesale electricity market.

Step 1: Understand Your Current Rate

Pull your last three utility bills and identify your current supply rate. If you're on ComEd's standard service, look for the "Price to Compare" listed on your bill or at ComEd's PTC page. This is your baseline.

Step 2: Compare Fixed vs. Variable Rate Offers

Fixed-rate contracts lock in your supply rate for 6 to 36 months — ideal for budget-conscious households and businesses. Variable rates float with the wholesale market — sometimes lower, sometimes dangerously higher. Most consumers benefit from fixed-rate stability, especially given Illinois's volatile winter demand spikes.

Step 3: Evaluate Contract Terms Carefully

Before signing any ARES contract, verify:

• No auto-renewal clauses that lock you in at inflated rates
• Early termination fees are reasonable (or absent)
• The rate quoted is "all-in" — not just the energy component with pass-through charges added later
• The contract length aligns with your plans (moving? relocating a business?)

Step 4: Check the Supplier's ICC License and Reputation

Only work with ICC-licensed ARES providers. You can verify licensing and check complaint history at the Illinois Commerce Commission. A supplier with a high complaint rate relative to its customer base is a red flag regardless of how attractive its rate looks on paper.

Step 5: Consider Green Energy Options

Illinois's deregulated market lets you choose renewable energy supply at competitive rates — often just a small premium over standard supply. If your household or business has sustainability goals, this is an advantage that regulated-state consumers simply don't have. Learn more about Renewable Energy Options in Illinois.

Is Deregulated Energy in Illinois Actually Saving You Money? The Truth Behind Your Bill

Let's cut through the noise. The honest answer is: deregulation in Illinois can absolutely save you money — but only if you're actively engaged.

The Default Customer Problem

A substantial portion of Illinois consumers never switch — they remain on their utility's default supply rate indefinitely. For these customers, deregulation provides zero benefit. In fact, utility default supply rates sometimes exceed competitive market rates by 10–20%, meaning passive consumers may actually be paying a "deregulation penalty" by not engaging with the market.

The Active Consumer Advantage

Customers who work with an independent energy broker, monitor market conditions, and sign competitive fixed-rate contracts consistently outperform both the utility default rate and their regulated-state counterparts. The key levers:

• Timing: Wholesale electricity prices in Illinois tend to be lowest in spring and fall "shoulder seasons" — the best windows to lock in annual contracts.
• Term length: Multi-year fixed contracts locked in during low-price periods deliver compounding savings.
• Broker access: Independent brokers can solicit quotes from dozens of ARES simultaneously, creating genuine competitive tension that solo shopping can't replicate.

The Bottom Line on Illinois vs. Regulated States

Regulated-state consumers in low-cost states like Kentucky or Missouri may appear to pay less — but that advantage is tied to geography and fuel mix, not policy. Illinois consumers who actively use their cheap electricity supplier options available in the deregulated market can consistently land supply rates competitive with or better than neighboring regulated states.

The deregulated model doesn't automatically save you money. But in the hands of an informed consumer or a skilled energy broker, it's one of the most powerful tools for reducing your monthly utility costs available anywhere in the country. Ready to start? Contact IllinoisEnergyPrices.com for a free, no-obligation market comparison today.

Frequently Asked Questions: Illinois Electricity Deregulation

Is Illinois a deregulated energy state?

Yes. Illinois deregulated its electricity market in 1997 under the Electric Service Customer Choice and Rate Relief Law, giving both residential and commercial customers the right to choose their electricity supplier independently of their utility.

Can Illinois residents really save money by switching suppliers?

Yes — but only with an informed approach. Illinois residents and businesses can save by choosing an ARES that offers rates below the utility's Price to Compare. Savings depend on usage, market timing, and contract type. Fixed-rate contracts during low-price windows deliver the most consistent results.

What is the Price to Compare in Illinois?

The Price to Compare (PTC) is the rate your utility (ComEd or Ameren) charges for the supply portion of your bill. It changes periodically. Any ARES offering a rate below the PTC represents potential savings — but compare all-in rates, not just the energy component.

Do regulated states have lower electricity bills?

Not necessarily. Some regulated states like Kentucky have lower rates due to coal generation, but many regulated states — Wisconsin and Indiana among them — pay more than Illinois consumers who actively shop the deregulated market. Fuel mix and infrastructure costs often matter more than regulation type.

How do I switch electricity suppliers in Illinois?

Contact an independent energy broker, gather your recent utility bills, compare fixed-rate offers from multiple ARES, review contract terms carefully, and sign with your chosen supplier. Your utility handles the seamless transition with zero service interruption.

Are there risks to switching electricity suppliers in Illinois?

Key risks include variable rate plans that can spike dramatically, auto-renewal clauses locking you into unfavorable rates, and early termination fees. Working with a reputable broker and choosing fixed-rate contracts with no auto-renewal mitigates the vast majority of these risks.

What is an ARES in Illinois?

ARES stands for Alternative Retail Electric Supplier — a company licensed by the Illinois Commerce Commission to sell electricity supply in the deregulated market. Over 70 ARES are licensed in Illinois as of 2025.

Does switching suppliers affect my power reliability?

No. ComEd and Ameren still own and operate all delivery infrastructure. If the power goes out, your utility responds — not your supplier. Reliability is completely unaffected by your supplier choice.