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Exelon Corporation’s (EXC - Analyst Report) unit – Commonwealth Edison Company (ComEd) – plans to lower the electricity rates for its residential customers. The company has already filed its new supply rate request to the Illinois Commerce Commission. ComEd’s effort toward rate reduction is part of the “Prices To Compare”. If approved by the concerned authority, the residential consumers will be getting electricity by paying a lesser amount applicable Jun 2013.

Per the rate revision appeal, the electricity distribution rate is expected to decline in the range of 5 to 7 cents per Kilowatt-hour (kWh). The decrease in electricity distribution rate was primarily driven by a drop in energy prices.

As per the Illinois Commerce Commission’s policy, the consumers of the territory can choose electricity providers through Price to Compare. Consumers can avail of electricity from their preferred companies at a cheaper rate and also assess rate-offers from alternative retail electricity suppliers.

The electricity rates under Price to Compare is ascertained by using anticipated electricity supply and transmission costs, which contribute nearly two-third of the average residential customer bill. The remaining one-third of the bill is calculated from delivery charges.

Drop in residential electricity rate is a positive step for ComEd to stop customer attrition. This aggressive attempt will enable the company to compete with its peers in a better way. Not only will it enable the company to regain consumers’ interest in terms of their electricity bills, it may also help in regaining its old customers apart from gaining new ones.

In the service territory of ComEd, more than 40 alternative suppliers are certified to provide electricity to residential customers. Approximately 75% of ComEd customers have already switched to an alternative supplier.

It is evident from Exelon’s current activities that it is focusing on utility rate reduction and continues to strengthen and modernize its utility assets. A couple of days ago, the company completed the digital improvement of its first substation called Wallace, based in Chicago. The implementation of latest technologies enables the company to provide uninterrupted services to its customers as well as strengthen system competence by reducing malfunctions.

To strengthen and modernize Exelon’s utility generation and distribution assets, the company plans to invest $5.5 billion in 2013 under its capital spending program. We appreciate the company’s efforts toward providing uninterrupted reliable utility at a lower price.

Chicago, IL.-based Exelon Corporation currently has a Zacks Rank #3 (Hold). Other stocks from the industry that are presently performing better include Brookfield Infrastructure Partners L.P. (BIP - Snapshot Report), Otter Tail Corporation (OTTR - Snapshot Report) and Pike Electric Corporation (PIKE - Snapshot Report). All the three stocks carry a Zacks Rank #1 (Strong Buy).

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