Exelon Corporation (EXC - Free Report) announced that its unit Commonwealth Edison Company (ComEd) has received approval from the Illinois Commerce Commission to lower average monthly residential customer bill again from 2020. The revision in rates will result in a drop of 60 cents per month in average customer bill. The approval will result in $17-million decline in delivery service charges. This will mark the third decrease in rates in the last five years. Last year, the company had lowered rates by $24 million.
The firm has been investing on a regular basis to improve the reliability of its services. Smart grid investment and strengthening of infrastructure lowered outages and resulted in savings of $2.4 billion.
ComEd has been providing quality services to customers and downwardly revising its rates. Courtesy of rate revision, Exelon’s average residential rate is 20% below the average of the top 10 cities.
Factors Leading to Lower Rates
Utilities do not make any profit from the fuel component of energy prices and pass the impact of decline or increase in fuel prices to customers. This a primary cause for downward rate revision among utilities as many operators are shifting focus to clean and cheap natural gas for producing electricity. In addition, introduction of new technology in generation and distribution systems lowers operating costs and enables the utilities to reduce rates.
Recently, Duke Energy (DUK - Free Report) also lowered electricity rates for North Carolina customers. (Read more: Duke Energy Unit to Cut Rates, Boost Savings for Customers)
Zacks Rank and Key Picks
Exelon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A couple of better-ranked stocks from the same industry are Eversource Energy (ES - Free Report) and FirstEnergy Corporation (FE - Free Report) . Both the stocks hold a Zacks Rank #2 (Buy).
Long-term earnings growth for Eversource and FirstEnergy is pegged at 5.6% and 6%, respectively.
Eversource and FirstEnergy delivered average positive earnings surprise of 2.4% and 2.9% in the last four quarters, respectively.
Shares of the company have gained 9.9% in past 24 months compared with the industry’s 7% growth.
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