By: STEVE DANIELS |
FirstEnergy Solutions, the power supplier that serves about one-third of the competitive residential electricity market in northern Illinois, is pulling the plug in that region.
In a substantial downscaling of its retail operations, Akron-based FirstEnergy won’t bid for new contracts or renew existing ones with municipalities outside its home base of Ohio. For the 108 cities and villages the company serves in Illinois, that means it will honor the contracts it has, but they will have to find a new supplier or send their residents back to their utilities when those deals expire.
FirstEnergy also will exit the market serving most commercial customers in Illinois. It will continue to supply very large industrial firms — those consuming at least 700,000 kilowatt-hours of electricity annually.
The news is yet more evidence of a northern Illinois competitive power supply market that is growing much less competitive.
Another big player, Chicago-based Integrys Energy Services, is exiting the market through a pending sale to Chicago-based Exelon Corp., owner of incumbent utility Commonwealth Edison Co. Exelon will inherit Integrys’ contract to serve households in Chicago, the biggest city in the country to contract for electricity on behalf of its residents.
Integrys and FirstEnergy were by far by the biggest players in local municipal power contracting.
FirstEnergy, the retail supply unit of Akron-based utility holding company FirstEnergy Corp., plowed into Illinois three years ago when municipalities saw the opportunity to lock in 20%-plus savings from the rates charged by ComEd. Through aggressive pricing, FirstEnergy grabbed more than half the suburban business while Constellation, Exelon’s retail unit, lost out on most deals.
Struggling against ComEd
At the time, Exelon said suppliers were pricing the business too low. Now, FirstEnergy is exiting Exelon’s backyard as dramatically as it entered.
ComEd’s prices now are more or less at market levels after some higher-than-market supply contracts rolled off. Suppliers like FirstEnergy have struggled this year to beat the utility’s rate.
“We’re finding it increasingly difficult to be able to offer residential customers stable, long-term pricing and savings,” FirstEnergy spokeswoman Diane Francis said.
FirstEnergy supplies 192,600 households in ComEd’s service territory and another 32,000 downstate. The largest villages it serves are northwest suburban Schaumburg and south suburban Orland Park.
Schaumburg’s contract runs until June 2017 and Orland Park’s until May 2017. Many of the villages FirstEnergy serves — for example, Glendale Heights, Carol Stream and North Riverside — have deals expiring early next year.
There aren’t public figures on FirstEnergy’s commercial market share. But the company is a significant player. It recently informed agents through which it procures new business that it wouldn’t be making offers any longer.
Like municipal customers, FirstEnergy will continue to serve business clients for the duration of their contracts.