Chicago Business Electricity Rates

Illinois opened its electricity market to competition under the 1997 restructuring law, and commercial customers have had full supplier choice for more than two decades. In Chicago and the collar counties, that means ComEd delivers your power and any licensed Alternative Retail Electric Supplier can sell you the energy.

What has changed recently is where the cost pressure comes from. For years, Chicago procurement was a straightforward exercise in shopping the energy rate. Today, capacity — the charge that pays generators to be available on the grid's worst day — has become one of the fastest-growing components of a ComEd-zone commercial bill, and it is priced by a market most buyers have never looked at.

The Three Parties on a Chicago Commercial Bill

• ComEd owns and operates the wires, reads your meter, restores outages, and bills you for delivery. Its delivery charges are set by the Illinois Commerce Commission and are the same for everyone on a given rate class. Delivery is not shoppable.
• Your supplier — either an ARES (Alternative Retail Electric Supplier, licensed by the ICC) or ComEd's default supply service — sells you the electricity. This is the shoppable part.
• PJM operates the regional grid that ComEd's zone belongs to. PJM's markets set the wholesale energy price and, critically, the capacity price that flows into your supply cost.

If you have never switched, you are on ComEd's default supply, which is procured through ICC-approved auctions and changes on a set schedule. Default supply is not a scam — but it is designed to be adequate, not competitive, and it gives you no ability to structure your purchase around your own load or risk tolerance.

Why PJM Capacity Is the Chicago Story Right Now

PJM runs a forward auction to secure enough generation for future peak demand. For years that auction cleared cheaply and capacity was a minor line on a Chicago bill. Recent auctions have cleared at dramatically higher levels, and the ComEd zone has been among the most exposed — driven by surging data center and electrification demand meeting a shrinking supply cushion as older generation retires faster than new capacity interconnects.

Two things follow for a Chicago business:

• If your contract passes capacity through, the increase lands directly on your bill. Many "fixed" supply agreements fix only the energy component. This is the single most important thing to verify in your current contract.
• Your capacity cost is partly your own doing. Capacity is billed against your facility's capacity tag (PLC), which is set by your demand during PJM's coincident peak hours the previous summer. Lower your usage in those hours and you permanently lower the tag that drives next year's capacity bill.

That second point is the leverage. You cannot change the auction clearing price, but you own half the multiplication. We cover the full mechanism in PJM capacity charges are rising and the underlying concept in understanding capacity charges.

Chicago Load Profiles That Price Differently

• Loop and River North office towers. Weekday-daytime load with heavy summer HVAC coincidence — meaning high capacity tags relative to consumption. Buildings pursuing Chicago Energy Rating and benchmarking compliance often find the capacity conversation and the efficiency conversation are the same project. See commercial real estate energy procurement.
• Industrial corridors and near-west manufacturing. Multi-shift plants have strong load factors that should command tight supplier margins, and process loads that are often more shiftable than operations teams assume. See how PJM manufacturers approach this.
• Cold storage and food distribution. The Chicago region is a national food logistics hub. Refrigerated load peaks with the grid, which is the worst possible correlation for capacity tags — and the best possible candidate for thermal pre-cooling. See cold storage energy costs.
• Data centers. Elk Grove Village and the surrounding corridor form one of the largest data center clusters in the country, with near-flat load and enormous capacity obligations.
• Hospitals and universities. Non-curtailable, reliability-critical, high load factor. Structure and budget certainty usually matter more than the last basis point. See healthcare energy procurement.

Natural Gas Choice in Chicago

Electricity gets the attention, but Chicago-area businesses also have gas supplier choice through Peoples Gas, North Shore Gas, and Nicor Gas transportation programs. For any facility with meaningful heating, process, or steam load, gas is frequently the larger dollar opportunity — and it is almost always the more neglected one, because gas contracts tend to roll quietly for years. Our commercial natural gas procurement guide covers how transportation programs and supplier pricing fit together.

What Chicago Businesses Get Wrong

• Assuming "fixed" means fixed. If capacity, transmission, or ancillary services are passed through, a rising PJM market flows straight to you regardless of the headline rate. Read the pricing exhibit, not the cover page.
• Ignoring the capacity tag. Most Chicago commercial buyers have never seen their PLC. It is one number, it drives a large and growing cost, and it is reducible.
• Signing on an unsolicited call. Illinois has a long history of aggressive retail supplier marketing to commercial accounts. A rate quoted over the phone with no load analysis behind it is a margin opportunity for the caller, not a price discovery process for you.
• Renewing without shopping. Incumbent renewal offers price in the expectation of inertia. In a market with dozens of licensed ARES, that expectation should be expensive to hold.
• Never auditing ComEd delivery. Rate class, meter multipliers, and rider application go wrong and stay wrong. A bill audit recovers retroactively, and delivery is a large share of a Chicago bill.

How to Lower a Chicago Electricity Bill

In order of return:

• Find out whether capacity is fixed or passed through in your current contract. Everything else depends on the answer.
• Get your capacity tag and build a plan to lower it. Curtailing during PJM's summer coincident peaks reduces a cost that recurs every year — and it stacks with demand response revenue if your load qualifies.
• Run a structured solicitation across licensed ARES. Identical terms, same day, comparable numbers. Start six to twelve months before expiration.
• Match structure to risk. Fully fixed, block and index, or index — each fits a different tolerance. Chicago's capacity environment makes the fixed-versus-pass-through decision unusually consequential right now.
• Do not leave gas on the table. If you have process or heating load, price it deliberately rather than letting it roll.

Frequently Asked Questions

Can any Chicago business switch electricity suppliers?

Yes, if you are served by ComEd. Illinois has had commercial retail choice since the early 2000s, and any Alternative Retail Electric Supplier licensed by the Illinois Commerce Commission can serve you. Businesses served by a municipal utility or a rural electric cooperative elsewhere in Illinois generally cannot shop.

Does switching suppliers change who fixes my power?

No. ComEd remains your delivery utility regardless of supplier. ComEd reads the meter, maintains the lines, and restores outages, and you continue to call ComEd for service problems. Only the supply portion of your bill changes.

What is a capacity tag or PLC, and how do I find mine?

Your capacity tag (peak load contribution) is a facility-specific value set by your demand during PJM's system peak hours the prior summer. It determines your share of capacity cost. ComEd calculates it annually; your supplier or broker can pull it, and any competitive quote you receive is already built on it.

Is ComEd's default supply rate a good deal?

It is a benchmark, not a strategy. Default supply is procured through regulated auctions on a fixed schedule, so it reflects whatever the market looked like during those procurement windows rather than what your specific load could be priced at today. It also gives you no ability to choose term, structure, or timing — which are where most of the savings in a competitive market actually come from.

Why did my Chicago electricity bill rise even though my rate did not change?

Most often because a pass-through component moved — capacity, transmission, or a ComEd delivery rider — or because your billed demand rose. A rate that is fixed on the energy component only will still move with the market on everything else.