"Illinois deregulated in 1997, so just shop and save." That story is wrong twice.
Most Illinois energy articles tell the same story: in 1997 the legislature opened the market, alternative suppliers entered, prices fell, end of article. Two of those statements were partly true in 2007. None of them describes what is happening in 2026.
What the 1997 Customer Choice Law actually did was much narrower. It broke up the vertical monopolies of ComEd and Illinois Power (now Ameren Illinois) into a wires business and a competitive supply business. It cut residential rates by 20% and froze them through January 2007. And it never opened anything for the customers of the state's 30+ rural electric cooperatives or 30+ municipal electric departments, who still cannot pick a supplier in 2026.
Even the residential opening in 2002 produced almost no individual shopping. What did emerge, and what genuinely lowers Illinois bills today, is municipal aggregation: your city negotiates one contract for the whole town. That is a peculiar IL invention, not the textbook deregulation story.
And the rules currently moving your bill were not written in 1997. The big ones are ICC Rule 412 (2018), CEJA (2021), and a single PJM auction in July 2025 that just lifted the ComEd June bill. Read those first, then 1997 makes sense.
What deregulation actually meant in Illinois.
Three structural changes turned a state of regulated monopolies into a hybrid market. Two of them were durable wins. The third created the consumer-protection problems the ICC is still cleaning up.
Break the vertical monopoly
Each utility had owned generation, transmission, distribution and retail under one roof. The law forced ComEd and Illinois Power to spin off most of their power plants to unregulated affiliates and to wholesale buyers. By 2002 the utilities were pure wires-and-billing companies for their default-supply customers.
Plug into the regional grids
ComEd joined PJM in 2004. Ameren Illinois sits in MISO. Both run day-ahead and real-time wholesale auctions. This is the genuinely competitive layer of US deregulation, and it is the one that actually lowered wholesale electricity costs for a decade.
Open the retail market
From October 1999 large commercial accounts, then from May 2002 every residential and small-business customer of ComEd, Ameren or MidAmerican could buy the supply portion of their bill from an ARES. Wires, meter and outage line stayed with the regulated utility. This is the layer that needed fixing.
Phase-in dates and where you can (or cannot) shop
| Utility | Wholesale grid | Residential choice | Notes |
|---|---|---|---|
| ComEd | PJM (since 2004) | May 2002 | ~4M customers, all of Chicago and northern IL |
| Ameren Illinois | MISO | May 2002 | ~1.2M electric + ~813K gas, central + southern IL |
| MidAmerican Energy | MISO | May 2002 | ~80K IL electric in Quad Cities (Moline, Rock Island) |
| Mt. Carmel Public Utility | MISO | 2002, but no ARES | Eligible on paper, never had a registered supplier |
| Rural electric cooperatives | MISO / SPP | Not eligible | 30+ member co-ops including Jo-Carroll, Adams, Corn Belt |
| Municipal electric departments | Various | Not eligible | 30+ towns: Naperville, Springfield CWLP, Batavia, etc. |
Source: 220 ILCS 5 Article XVI (Customer Choice law), individual utility tariffs, and the ICC Plug In Illinois portal. Verified May 2026.
The decade the retail market quietly went wrong.
When the 1997 freeze expired on 1 January 2007, ComEd customers saw bills jump roughly 50% within a year. Two responses followed, one structural and durable, one corrective and slow.
! The 50% rate jump
The 1997 law had frozen residential rates 20% below their 1996 level. By 2007 utility costs had risen, but utility revenues were locked. The unfreeze passed all the deferred cost straight to ratepayers in a single quarter. Public anger was severe enough to drive a special legislative session.
! Birth of the Illinois Power Agency
August 2007: the General Assembly created the Illinois Power Agency to procure default-service supply at competitive auction for ComEd and Ameren, removing the utilities from the buying decision. Today the IPA runs a three-year laddered procurement and an annual capacity hedge for Ameren default customers.
! The 2014 polar vortex
January 2014 wholesale gas and power prices spiked across PJM and MISO. ARES variable-rate customers in Illinois saw bills 2 to 3 times normal. The ICC opened a comprehensive review of supplier marketing that eventually became Rule 412.
! Door-to-door era
Through the mid-2010s ARES sales agents knocked door to door across the Chicago suburbs and downstate. Many pitched a low teaser rate (one to three months) that reset, often without clear notice, to a variable rate well above utility default. ICC complaints climbed every year until the 2018 reset.
By 2017 the Citizens Utility Board was tracking that average IL residential ARES customers were paying more than utility default. That data is what forced the ICC's hand.
The ICC rules every Illinois ARES has lived under since 2018.
83 Ill. Adm. Code 412 rewrote what an ARES is allowed to do when it markets to a residential or small-commercial customer. The full text sits on the ICC ARES authority page; the practical shifts are below.
| Rule | Before (2002 to 2018) | After (Rule 412, in force) |
|---|---|---|
| Disclosure | Each ARES wrote its own contract. | Mandatory Uniform Disclosure Statement: post-promo rate, term, renewal terms, ETF, all in one document. |
| Enrolment | Verbal yes at the door could trigger a switch. | Third-party verification or signed contract required. "Slamming" (switching without authorisation) is grounds for sanction. |
| Rescission | Not standardised. | 10-day window after the utility processes the enrolment, with no penalty. |
| Renewal terms | Auto-rollover onto variable rate was the industry norm. | Renewal notice 30 to 60 days in advance with the post-renewal price in writing. |
| Door-to-door | Largely self-regulated. | Sales agents must wear badges, identify employer, leave on request. |
| Enforcement | Complaint-driven, slow. | Active ICC docket reviews; Attorney General lawsuits (Residents Energy, Major Energy, etc.). |
Why this is the rule that matters today. Rule 412 does not say ARES are dead. It says any door-knock or robocall pitch you receive must walk you through the Uniform Disclosure Statement before you sign, give you a written 10-day exit, and never enrol you without a verifiable yes. If a salesperson cannot meet that bar, the offer is non-compliant and you can file a complaint at the ICC.
Why Illinois aggregation, not individual shopping, is the win.
Illinois is the only US state where municipal aggregation became the dominant form of retail competition. Over 700 cities and counties have voted in since 2011, and the model is the reason most IL households who buy from a non-utility supplier are not on an ARES at all.
Aggregating communities
Mostly Chicago suburbs and downstate Ameren towns. Live list maintained by Plug In Illinois.
Default model
Voter referendum first, then automatic enrolment for every eligible household. You can leave at any time, free.
Typical contract term
Most programs lock the price for one or two years. Some add a green-energy match.
Eligibility limit
Only ComEd and Ameren territory can aggregate. Co-op and municipal-utility customers cannot.
Three reasons aggregation works where ARES did not
- A Volume changes the bargaining math. An ARES quoting one household has to amortise marketing, billing and bad debt across that one account. A city bidding 25,000 accounts at once cuts those line items to almost nothing. The supplier's all-in cost to serve falls by a wider margin than the discount the city wins, so both sides come out ahead.
- B The city is a sophisticated counterparty. Most aggregation programs hire an outside consultant to run the RFP, evaluate every bid against the IPA's published default rate and price-lock the contract before signature. Individual customers cannot do that on a door-knock.
- C The exit is real. Opt-out enrolment with free exit at any time is the cleanest possible consumer contract. The supplier knows it has to keep the price competitive or watch the city open a new procurement at the next renewal. Compare with a 24-month ARES contract carrying a $100 early-termination fee.
Check whether your town has an active program at the Plug In Illinois aggregation list. If your bill shows a supplier other than ComEd or Ameren you did not personally pick, you are almost certainly on aggregation.
Why your ComEd bill jumps in June, even though deregulation has not changed.
On 22 July 2025 the PJM 2026/2027 Base Residual Auction cleared at $329.17 / MW-day, the highest price in the auction's history and a 1,038% jump from $28.92 the year before (PJM auction summary). That single number is the biggest thing happening to your IL bill in 2026.
/ MW-day, 2026-27
PJM Base Residual Auction clearing price for the delivery year that begins 1 June 2026.
Jump vs 2024-25
Up from $28.92 / MW-day. The 22 July 2025 result was 22% above the prior record.
ComEd PTC, Jan to May 2026
Non-summer Price to Compare set at the IPA's October 2024 procurement.
ComEd PTC, June 2026
10.399¢ summer base + 0.23¢ Purchased Electricity Adjustment. Higher again in July and August.
Why ComEd is hit and Ameren is not, this time
The PJM capacity auction is a single annual market that pays generators to be available three years ahead. It cleared high in 2025 because forecasted PJM peak load grew by more than 5,400 MW year on year, almost entirely driven by data-center build-out across northern Virginia, central Ohio and northern Illinois. PJM uses an administrative capacity price cap, but the cap was not enough to absorb the demand jump.
Ameren Illinois sits in MISO, a different wholesale market with a different capacity construct (Planning Resource Auction). MISO's most recent results were elevated but nowhere near PJM's. The Ameren supply-only rate for 0 to 800 kWh sat at 8.769 ¢/kWh through May 2026, with the over-800 tier at 7.850 ¢/kWh.
So the same state, the same 1997 deregulation framework, the same ICC rules now produces materially different supply outcomes north and south of I-80 in any given month. That is a feature of physical grid geography, not a policy decision the ICC can reverse.
The ICC also approved delivery-rate hikes in December 2025 ($243M for ComEd, $48M for Ameren). Delivery is the wires line of your bill: that increase lands regardless of which supplier you pick.
Four reasons Illinois retail choice did not lower the residential bill.
The interesting question is not "what is the new rule book", it is why a market that worked on paper in 1997 produced losses for households who shopped. Four structural shifts explain it.
Wholesale volatility passes through faster than utility default
When PJM or MISO prices spike (2014 polar vortex, 2022 winter gas crunch, 2025 capacity auction), the IPA-procured utility default smooths the shock over three years of laddered hedges. Most ARES variable products did not. That asymmetry is what turned "switch and save" into "switch and pay more" for the average Illinois household.
Acquisition costs are bigger than the available margin
An individual residential customer is expensive to acquire (door knocks, telemarketing, customer-service overhead) and cheap to lose. ARES priced for that reality by adding a margin on top of the IPA wholesale auction. Aggregation removed the acquisition cost. The remaining margin is small, but it is a discount instead of a premium.
The shoppable share keeps shrinking
In 1997 the supply line was roughly two-thirds of an IL residential bill. In 2026 it is closer to half. Delivery, taxes and ICC-approved capital riders are climbing faster than supply. A 10% discount on supply alone is now roughly 5% off the all-in bill. That is why even good ARES deals do not feel like savings.
Data centers are now the marginal demand
The July 2025 PJM auction priced in 5,400+ MW of new load growth, almost all of it large-load campus customers paying for firm capacity. ComEd residential customers share the resulting capacity price across the same northern-IL footprint. This is a long-running structural shift: the residential supply market is, increasingly, the price-taker for industrial demand the residential customer never asked for.
Rule 412 does not pretend competition can fix any of these layers. It restricts ARES competition to the narrow zone where it can still create value: a fixed-price contract that beats utility default, with the savings written into the Uniform Disclosure Statement. Outside that zone, the math is on aggregation's side.
Six things to do in 2026, ranked.
Check if your town aggregates
Look at the supplier name on your last ComEd or Ameren bill. If it is not the utility itself, you are most likely on municipal aggregation. The Plug In Illinois community list shows whether your town has an active program and when it renews.
Look up your Price to Compare
The IL utility default rate (the "Price to Compare") is set by the IPA. Pull the current value from Plug In Illinois or your latest bill. Any ARES offer should beat that number for the full contract term, not just the teaser period.
Refuse variable-rate offers
If the rate "follows the market" or resets monthly with no cap, that is the product type that produced the polar-vortex bill shock and most of the $2B+ in IL consumer losses. Walk away. A compliant Uniform Disclosure Statement will show the post-promo rate; no statement, no deal.
Check LIHEAP eligibility first
Illinois LIHEAP is run by the Department of Commerce and Economic Opportunity. The benefit is calculated against your utility default rate, not your ARES rate, so switching usually erodes the discount. Apply through DCEO LIHEAP first.
Diary your end-of-term
Rule 412 requires a renewal notice 30 to 60 days before a fixed term ends. Set a reminder for the day you sign. If the renewal price is not better than the current IPA utility default, exit and go back to default supply, free.
If a supplier misbehaves, file
The ICC tracks every informal complaint by supplier on its scorecard. File online at icc.illinois.gov/file-complaint or call 1-800-524-0795. Attorney General lawsuits against IL ARES have all started from accumulated complaint records.
Common questions about Illinois deregulation.
The legal framework is the 1997 Electric Service Customer Choice and Rate Relief Law. Competition rolled out in two phases. October 1999: large commercial and industrial accounts could shop. May 2002: every residential and small-business customer of ComEd, Ameren Illinois or MidAmerican Energy became eligible. Customers of rural electric cooperatives or municipal electric departments were never opened up, and still cannot switch in 2026.
An Alternative Retail Electric Supplier is an ICC-licensed competitive supplier you can pick for the supply portion of your bill. Your regulated utility (ComEd, Ameren or MidAmerican) still owns the wires, reads your meter and restores outages. Since 2018 every ARES must give you a Uniform Disclosure Statement, can only enrol you with explicit authorisation, and must let you rescind within 10 days (ICC ARES rules). The current licensed list lives on the ICC site.
Municipal aggregation is the city or county doing the shopping on your behalf. Section 1-92 of the Illinois Power Agency Act lets a municipality run a voter referendum, then negotiate a single supply contract for every eligible household in the boundary. Most programs are opt-out: you are automatically enrolled, you can leave at any time without a fee. Over 700 IL communities have voted in since 2011, the most of any US state. Aggregation is the only form of retail competition that has consistently saved Illinois households money over the long run (live community list at Plug In Illinois).
The wholesale capacity market PJM ran in July 2025 cleared at $329.17 per MW-day, a record high and a 1,038% jump from the prior year (PJM auction summary, 22 July 2025). Those capacity costs flow into the ComEd Price to Compare. The Non-Summer 2025-2026 rate was 9.66 ¢/kWh; the June 2026 rate is 10.629 ¢/kWh and the summer line items spike further. Ameren Illinois sits in the MISO wholesale market, which did not have the same auction outcome, so Ameren default rates did not jump the same way.
They are close to the US median. The March 2026 residential price was 18.86 ¢/kWh versus a US average of 18.83 ¢/kWh (EIA Electric Power Monthly Table 5.6.A, released 21 May 2026). That hides a big internal split: northern IL on ComEd / PJM is now structurally exposed to data-center demand growth, while central and southern IL on Ameren / MISO see flatter supply prices. The all-in bill in both areas rises faster than supply, because ICC-approved delivery rates climbed in December 2025 ($243M for ComEd, $48M for Ameren).
The data argues against it for most residential customers. The Citizens Utility Board, the state-chartered consumer advocate, reports that IL consumers have lost over $2 billion to alternative suppliers since 2015, and recommends sticking with utility default supply or with a municipal aggregation contract (CUB 2026 power bill guide). If you do consider an ARES, the only safe offer is a fixed-rate contract with the post-promo rate written into the Uniform Disclosure Statement, no variable rollover and no early-termination fee out of line with the contract length. Cross-check the licensed list on the ICC ARES page before signing.
Yes, Illinois does not have the same blanket low-income ban that NY introduced in 2016. But the math almost always argues against it. The Low Income Home Energy Assistance Program (LIHEAP) and Percentage of Income Payment Plan (PIPP) discounts are calculated against your utility default rate. Switching to a higher-priced ARES erodes those benefits. Apply through the Illinois Department of Commerce and Economic Opportunity first.
Yes if your gas utility is Nicor Gas, Peoples Gas or North Shore Gas. The ICC runs a parallel Natural Gas Customer Choice program with licensed Alternative Gas Suppliers (AGS). The same caveat applies: long-running ICC reviews show most residential gas shoppers do not save against the regulated supply rate. Use the ICC complaint page if a supplier behaves badly.