November 12, 2012
Municipal Electric Aggregation Approved
On August 14, 2012 the Village Board approved a resolution authorizing placement of a referendum regarding an opt-out program on the November 6, 2012 ballot.
More information will continue to be released throughout the process.
Electric Aggregation Overview
Municipal electric aggregation allows municipalities to pool residential and (eligible) small businesses together for the joint purchase of electricity. Through economies of scale, a community can leverage the buying power of thousands of residents and small businesses in an effort to obtain a lower price for the supply of electricity.
There are two components to electricity: supply and distribution. ComEd generates the supply of electricity through their power plants, which is then transmitted and distributed to customers through their infrastructure. With aggregation, a municipality can seek a lower price for the supply of electricity with alternative supplier other than ComEd; however, ComEd will continue to distribute electricity to consumers through their infrastructure.
On August 10, 2009 Governor Quinn signed into law Public Act 096-0176, amending the Illinois Power Agency Act to allow municipalities to arrange for the provision of electricity to residential and small businesses by alternative electric suppliers. The legislation contemplates an “opt-out” electricity aggregation program where residential and small businesses would be automatically switched to the alternative supplier selected by the Village, unless a customer opts out of the program.
In order for the Village to create a municipal electric aggregation program, the referendum on November 6, 2012 must be approved by a majority of voters. The referendum question asks voters if the village should be given the authority to seek competitive pricing bids for electric services under a single contract. Specifically it asks:
“Shall the Village of Schaumburg have the authority to arrange for the supply of electricity for its residential and small commercial retail customers who have not opted out of such a program?”
If the referendum passes in November, bids will be solicited from alternative retail electric suppliers in Illinois for the Village of Schaumburg’s aggregated electricity load. The bids will be compared to ComEd’s current rates and the village only intends to approve a bid that will result in lower electricity rates than the current ComEd rates. If favorable pricing does not exist, the Village will not enter into an agreement, and remain with ComEd.
Based on the timing of the above process, a village aggregation program would not become effective until 2013.
If a program is implemented, all residential and eligible small business accounts will be automatically enrolled in the program with the new electricity supplier. Notices will be mailed in advance of the account transfers.
As defined in Article XVI of the Public Utilities Act, “’Small commercial retail customer’ means those nonresidential retail customers of an electricity utility consuming 15,000 kilowatt-hours or less of electricity annually in its service area.” For those commercial retail customers who do not qualify for the municipal aggregation program they have the option of joining the Metropolitan Mayor Caucus’s “Opt-In” Energy Savings Program (ESP) with Clean Air Counts. More information can be found at www.energysavingprogram.net.
Please note that under an opt-out program, ComEd will remain the distributor of electricity in the village; the selected alternative supplier will merely generate the electricity provided and deliver it to ComEd for distribution. Additionally, customers will continue to receive electricity bills from ComEd. Likewise, ComEd will remain responsible for all distribution system issues, including power outages.
For more information about electrical aggregation, contact:
Jessica DeMory of the Village Manager’s Office at 847.923.4702