Illinois Power Agency and Default Service Explained

If your Illinois business has never signed a contract with a competitive electricity supplier, you are on default service — and the price you pay for it traces back to the Illinois Power Agency. Understanding how that works is the foundation for judging whether any competitive offer is actually worth taking.

What the Illinois Power Agency is

The Illinois Power Agency (IPA) is a state agency with a specific job: it procures electricity supply on behalf of eligible customers who have not chosen a competitive supplier. Before the IPA existed, each utility handled its own default-supply purchasing. Centralizing that function was meant to bring a consistent, planned, and transparent process to how default power is bought.

It is important to separate the IPA from the Illinois Commerce Commission. The ICC is the regulator — it licenses suppliers, approves delivery rates, and enforces consumer protections. The IPA is the buyer — it plans and executes the procurement of default supply. They work in the same market but do different jobs. The IPA publishes its plans and procurement details at ipa.illinois.gov.

How default service works

"Default service" (also called utility or basic supply service) is simply the supply you get automatically if you never sign a competitive contract. There is nothing to enroll in — it is the baseline.

Here is the mechanism:

1. The IPA procures electricity supply through a structured process designed to serve default-service customers across the coming period.
2. Your delivery utility — ComEd in the north or Ameren Illinois in central and southern Illinois — provides that supply to you as part of your regular service.
3. The cost of that procured supply is reflected in your supply charge, while the utility continues to bill separately for delivery.

Because supply is procured in advance and in blocks, the default rate does not move with the daily market. It reflects what was purchased through the procurement process, adjusted according to the utility's tariff. That is why the default rate can look stable for stretches and then step to a new level when new procurement takes effect.

Remember the core split from the deregulated market: choosing default service versus a competitive supplier only affects the supply line. Delivery, riders, and taxes are unchanged. Whoever supplies your electricity, the utility still delivers it, maintains the lines, and restores outages.

The price to compare

The single most useful concept for any commercial buyer is the price to compare.

The price to compare is the utility's default supply rate, expressed so you can line it up directly against a competitive supplier's supply offer. Its whole purpose is to answer one question: is this supplier's price higher or lower than what I would pay on default service for the same thing?

A few points make it genuinely useful:

• It covers supply only. The price to compare reflects the supply portion of your bill, not delivery. A supplier can only compete on supply, so that is what you compare. If an offer is quoted "all in" or bundled with delivery, restate it against the supply-only price to compare before judging it.
• It is a moving benchmark. Default supply is re-procured over time, so the price to compare changes. An offer that beat it last year may not beat the current figure, and vice versa.
• It is published by neutral sources. Your utility publishes the price to compare, and the state's Plug In Illinois (plugin.illinois.gov) provides comparison information. Confirm the number from those sources rather than trusting a supplier's characterization of it.

For a deeper treatment, including situations where staying on default service is the better call, see the price to compare and when utility supply wins.

How a competitive offer is measured against default

When a supplier presents a commercial offer, disciplined evaluation looks like this:

1. Find the current price to compare for your utility and rate class from the utility or Plug In Illinois.
2. Restate the offer as a supply-only rate. Strip out anything that is really a delivery charge or a separate fee so you are comparing supply to supply.
3. Match the structure. A fixed price for a term is not directly comparable to a variable or indexed price. Understand whether the offer is fixed, indexed, or a block-and-index blend, and over what term.
4. Read the terms, not just the number. Bandwidth or swing limits, pass-through clauses, and renewal language all affect what you actually pay. A lower headline rate with tight bandwidth and an automatic renewal can end up costing more than default service.
5. Decide against the benchmark. If the offer's supply rate, given its structure and terms, beats the current price to compare in a way that fits your risk tolerance, it may be worth taking. If not, default service remains a perfectly legitimate choice.

Our commercial energy procurement resources walk through this comparison in detail, and the same logic applies on the commercial natural gas side, where the local gas utility provides default gas supply and competitive suppliers compete against it.

Why this matters for your business

Two practical takeaways:

• Default service is a real option, not a penalty. Sometimes it is priced below available offers. The mistake is not being on default service — it is never comparing, so you never actually know where you stand.
• A wholesale price is not the price to compare. PJM and MISO auction results describe wholesale markets, not your default rate. The price to compare is a retail benchmark set through the IPA process and the utility tariff. Use the published price to compare, not an auction headline, when you evaluate an offer.

For eligibility and enrollment mechanics, see how Illinois commercial electricity choice works. And remember that municipal-utility customers, such as those in Naperville and Springfield, are served by their municipal systems and do not have competitive supplier choice at all.

Sources

• Illinois Power Agency
• Plug In Illinois — official electric choice information
• Illinois Commerce Commission

This article is educational and promises no particular savings. Whether default service or a competitive offer costs less depends on your usage, the current price to compare, and the specific terms of any offer.