Electrical Aggregation Means That You Will Save Money Through The Joint Purchasing Of Electricity!!
Overview – What Is Municipal Aggregation Of Electricity?
An electricity aggregation program allows municipalities to pool residential and small commercial retail customers together for the joint purchase of electricity. By creating these 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. Joint Purchasing Saves Money!
There are two main components to electricity: supply and distribution. The supply of electricity is currently generated by ComEd at power plants. Electricity is then transmitted and distributed to homes and businesses through ComEd's infrastructure and power lines. With aggregation, a
municipality can seek a lower price for the supply of electricity with alternative suppliers other than ComEd; however, ComEd would continue to distribute electricity to consumers through its infrastructure. Therefore, ComEd would continue to send out electricity bills and be contacted for service needs. Please read the below description and reference the attached FAQs for more information.
Legislation – Why Is Electrical Aggregation Possible?
In 2009, the State of Illinois amended the Illinois Power Agency Act with Public Act 96-0716 to deregulate the electric market and provide for the municipal aggregation of electricity. Through deregulation, ComEd is no longer the only company that supplies electricity, but continues to provide power generated by others through its distribution system.
Process – How Does It Work?
In order for the Village to create a municipal aggregation program, a referendum must be approved by a majority of Homer Glen voters. The Village Board approved Ordinance No. 11-040 at the December 13, 2011, Village Board meeting providing for the referendum question to appear on the next general election ballot of
March 20, 2012. The referendum question will ask:
"Shall the Village of Homer Glen 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 program?"
If the referendum is approved, the Village may create a Plan of Operation and Governance, and hold at least two public hearings to discuss this plan. Once the plan is in place, the Village can solicit proposals and bids from suppliers who are licensed as alternative retail electric suppliers (ARES) in the state of Illinois. Bids are reviewed, and the Village determines if and who it will enter into an agreement with for energy supply. If favorable pricing does not exist, the Village will not enter into an agreement, and will remain with ComEd.
Based on the timing of the above process, a Village aggregation program would not become effective until late summer or fall of 2012.
Impact – How Will Electrical Aggregation Affect Me?
If an aggregation program is created, all residents and small businesses will be automatically enrolled in the program unless they "opt-out." Before the aggregation program begins, all residents would receive notice of their opportunity to opt-out of the program.
Regardless of whichever option residents and businesses chose, ComEd remains the utility provider delivering electricity to homes and businesses. Residents would continue to receive a ComEd bill and would continue to call ComEd in case of an outage or service need. The only difference would be a change in the supply rate of the electricity bill.
History
Municipal aggregation programs have been active in Ohio for several years, and are now spreading across Illinois. Over 20 Illinois municipalities passed referenda on the April 2011 ballot to begin the aggregation process (see attached list of communities). Over 100 additional
communities, like Homer Glen, drawn by lower supplier pricing, have placed referenda on the upcoming March 2012 general election ballot to continue towards the end goal of establishing a municipal aggregate program with the hope of providing savings for residential and small business consumers.
Resources
Frequently Asked Questions (FAQs) (PDF )
Public Act 096-0176 – Amendment to Illinois Power Agency Act (PDF )
Village Ordinance for Referendum (PDF )
Municipal Electrical Aggregation Article – Illinois Municipal Review (PDF )
Illinois Commerce Commission:
List of Communities with an Opt-Out Municipal Aggregation Program
Plug In Illinois
For more information about electricity aggregation, contact:
Cameron Davis
Village Manager
708-301-0632
Email Cameron Davis