Electric Aggregation

Following are a lot of questions and answers about the Electric Aggregation situation. All information comes from the Citizens Utility Board (CUB). Based on this information it appears that citizens who have electric service have choices. They can vote to have the County or a municipality participate in Electric Aggregation or they can vote against it. But even if the referendum passes, and the citizens do not want to participate, or the community is unable to negotiate a lower rate, the citizens have other options..

Bottom line seems to be that no matter the referendum outcome-- if what you desired was not accomplished by the vote;   you may still be able to negotiate a lower electric bill or you can continue with your current electric rate. Or, if the referendum passes in your area, and you do not want to participate, it is not a requirement.

What is community aggregation?

Illinois law allows municipalities and counties to purchase electricity on behalf of residential and small-business utility customers living within their borders. While municipalities choosing community aggregation would be responsible for negotiating the price of power from a supplier other than the traditional utility, your utility would still be responsible for delivering that power to your home, and billing you for it. In theory, communities could use the collective bargaining power of residents to negotiate for lower power prices from suppliers. To date, nearly 300 Illinois communities are either considering or participating in municipal aggregation.

Who purchases electricity under the current system?

The Illinois Power Agency (IPA) is a state office that negotiates power prices on behalf of most residential customers statewide. The agency buys power for the states' two biggest utilities, ComEd and Ameren. Those utilities pass the cost of power onto their customers with no markup.

Although the IPA negotiates power prices for a large number of consumers, a portion of that electricity is tied up in existing long-term electricity contracts signed following the utilities' now-abolished 2007 "reverse-auction" power-buying process. As those pricier contracts expire, the IPA will be responsible for purchasing more of the utilities' power, and electricity prices are expected to decrease. That means there could be less opportunity to save money with alternative power suppliers in the future.

If a community passes a referendum approving electricity aggregation, residents who don't wish to participate would have two opportunities to "opt out" of the program:

1. When the community sends out an initial letter notifying residents that their electricity supplier will change, and

2. when the utility sends customers a letter notifying them that their electricity supplier has changed. After receiving the utility notification, residents generally have 10 days to opt out.

So, even if your community passes a referendum, you don't have to participate in community aggregation if you don’t want to.

If a community fails to pass a referendum but still chooses to move forward, the program would be "opt in," where residents are not enrolled until they sign up. In any case, consumers always have the option of paying their utility's default prices—those negotiated by the IPA.

Who do I call if the power goes out?

Even if you choose to participate in community aggregation, your utility—ComEd or Ameren—is still responsible for delivering the electricity you purchase to your doorstep. So if the power goes out in your home, you should call your utility.

Would I get two bills?

In most municipalities, consumers will continue to get a single bill from their utility, but it's not a certainty.

Will municipal aggregation lower my electric bill?

Whether or not residents will get lower electricity rates would depend on the contract their community negotiates. If not, residents can opt out of the program.

Mark Pruitt, former director of the IPA, told the Chicago Tribune that communities should be careful not to sign long-term contracts that seem like a good deal now, but might not be in the future. Several expensive long-term electricity contracts for ComEd and Ameren are set to expire in May of 2013 and December of 2012, respectively, and the utilities' electricity prices could then drop.

What happens if I'm already enrolled with an alternative electricity supplier?

When residents are switched over to the community's negotiated supplier, most communities will separate out individuals who are already under contract with an alternative supplier. Still, it's wise for consumers to check with their community to find out what its process will be.

If I'm a Real-Time Pricing or Power Smart Pricing customer, will I be able to stay with the program if I opt for municipal aggregation?

ComEd's Real-Time Pricing and Ameren's Power Smart Pricing programs allow customers to pay hourly market electricity prices, rather than the utilities' fixed rates. Consumers who aren't home during the day, when energy prices tend to be highest, or who can shift high-energy usage activities like laundry or running the dishwasher to off-peak hours, benefit the most. In fact, participants have saved an average of about 15 percent on their power bills. To date, no municipal power agreements or individual alternative supplier plans offer real-time pricing options, so if you would like to enroll or stay enrolled in real-time pricing, you'll have to stick with your utility. Just like customers who are already enrolled with alternative suppliers, Real-Time Pricing and Power Smart Pricing customers will likely be filtered out when residents are switched over to the community's negotiated power supplier. Still, it's an important detail to check.

Will space-heat customers save with municipal aggregation?

Customers who use electricity to heat their homes often pay a lower rate than non-space heat customers, meaning they likely would not save money by switching to their community's aggregated electricity rates. Just like customers who are already enrolled with an alternative supplier, space-heat customers will likely be separated out when residents are transferred over to their community's negotiated supplier. Still, it's an important detail to check with your community.

Have other states launched community aggregation programs?

California, Massachusetts, New Jersey, Ohio and Rhode Island have community aggregation programs. Visit Municipal Aggregation for a list of participating Illinois communities.

What else can I do to lower my bill?

CUBenergysaver.com recommends hundreds of actions to help you create a personalized plan to cut your power bill. Consumers can connect to their ComEd accounts to track real savings, and earn rewards for their energy savings redeemable at local and national businesses. Signing up is free, and takes just a few minutes. On average, CUB Energy Saver users have cut their gas and electric bills by $130 a year.

CHECKLIST: WHAT EVERYONE SHOULD KNOW ABOUT COMMUNITY AGGREGATION

What price is the supplier offering and how does it compare with the utility's price?
While it is a basic question, it is the key question for consumers: Will I save money with municipal aggregation? Ask community leaders to be clear about the price being offered and match it up with your utility's "price to compare," listed on the front page of this guide.

What if I want to leave the alternative supplier?
Always check to see if you can get out of a deal without having to pay an exit fee.

What happens when my community's power contract ends?
After your municipality's agreement with an alternative supplier runs its course, will you automatically return to your utility's rates, or will you become a customer of the alternative supplier your community contracted with? Check with your community leaders to find out.

Are consultants advising my municipality on community aggregation, and if so, what fee(s) are they charging?
Many communities obtain a consultant to seek out and negotiate power prices on behalf of residents. These consultants charge fees—taxpayer dollars—for their services. Make sure your municipality's consulting fees, if any, won't eat up the electric bill savings residents of your community may see.

Will my community factor energy efficiency into its power contract?
Reducing power usage, especially during peak hours, reduces electricity costs for everyone. Find out what energy efficiency measures, if any, your community plans to include in its contract with an alternative supplier. To date, alternative power suppliers have not offered programs like Real-Time Pricing, which charges consumers an hourly market rate—rather than a fixed rate—for electricity, rewarding customers who use less energy when power prices and electricity demand are at their peak.

Will my community purchase Renewable Energy Certificates (RECs) to invest in "green" energy?
Many alternative power suppliers offer "green" plans, which ensure that a certain percentage of the power consumed will be put back onto the grid by renewable energy sources, like wind and solar power. Find out if your community plans to purchase RECs, and if it will cost you extra.