The Carbon-Free Energy Resource Adjustment from ComEd Explained
What is the Carbon-Free Energy Resource Adjustment on my ComEd Bill? (UPDATED MARCH 2024)
The Carbon-Free Energy Resource Adjustment (CFRA) is a line item on ComEd customer bills that reflects the cost of carbon-free energy sources, such as solar and wind power. The CFRA is intended to help Illinois move toward its goal of 100% clean energy by 2050.
However, some customers who have received a credit from ComEd in the past are now seeing charges on their bill? This could be due to the recent change in the Carbon-Free Energy Resource Adjustment (CFRA).
The "Illinois' Climate and Equitable Jobs Act of 2021 included provisions to sustain carbon-free nuclear plants during periods of low energy prices. When energy market prices are high, plant owners are required to compensate utility customers.
Customers received credits during the summer of 2022 as follows:
•4.306 cents per kilowatt hour (¢/kWh) from June through September
•4.115 ¢/kWh in October and November 2022
•2.384 ¢/kWh from December 2022 through February 2023
•0.033 ¢/kWh from March through May 2023
ComEd customer bills will now have a line for “Carbon-Free Energy Resource Adjustment”, which can be a credit or a charge depending on energy prices. The CFRA is effective through 2027.
The CFRA rate transitioned to a charge of 1.241 ¢/kWh beginning in June through September 2023, reflecting reduced energy prices.
Why Am I Seeing A Charge vs. A Credit Now?
Due to current energy prices today, ComEd is now required by law to reconcile the amount they paid in credits to customers with the amount they received from nuclear plants. ComEd provided $2.4 billion of bill credits during a period but received only $1.3 billion from nuclear plants, resulting in financial losses. The interest and reconciliation process were reviewed and approved by the Illinois Commerce Commission (ICC).
Since October 2023, the CFRA has been updated monthly to align with payments to or from nuclear plants.
For more information, visit ComEd’s hourly pricing website, providing real-time pricing, day-ahead pricing, and other public information to help customers understand real-time pricing.
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Back in June 2022, customers in the ComEd market in Illinois began to see a line item called the "Carbon-Free Energy Resource Adjustment" (CFRA) on their monthly utility distribution invoices. The CFRA comes with an associated usage-based credit or charge, which will vary by season and can be quite significant.
From June to September of 2022, the CFRA credit will be $43.06 per megawatt hour, while from October 2022 through May 2023 it will be $35.73 per megawatt hour. The high value of the CFRA is due to the Illinois Power Authority (IPA) conducting an auction for Carbon Mitigation Credits (CMC) that resulted in a weighted average price for PY 22/23 that was far above the auction price of $30 per megawatt hour. This has resulted in a negative value for ComEd that it must credit back to customers. Customers can either receive a refund by contacting ComEd or allow the credit to roll over for future use. The CFRA is intended to help Illinois move toward its goal of 100% clean energy by 2050, as outlined in legislation signed by Governor Pritzker last September. The Clean Energy Job Act is also expected to help increase the use of renewable energy in Illinois by making solar energy more cost-effective and practical through funding mechanisms.
Why Is My Carbon Free Energy Resource Adjustment Credit Lower than Previous Years?
The CFRA is based on the cost of carbon-free energy sources, which have been rising in recent months due to a number of factors, including the war in Ukraine and the rising cost of natural gas. As a result, the CFRA has also been rising, and customers are not seeing as much money back on their bills.
However, it is important to note that the CFRA is still a credit, and customers are still receiving money back from ComEd. The amount of money that customers receive will vary depending on their usage, but it is still a significant amount of money that can help to offset the rising cost of electricity.
In addition, the CFRA is only one part of the equation when it comes to the cost of electricity. The other major factor is the cost of the transmission and distribution of electricity, which is also regulated by ComEd. The cost of transmission and distribution has been rising in recent years, and this is another reason why customers are seeing higher electricity bills.
Call us now if you have any questions about your credit or our energy procurement services.
