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Village of Palos Park
8999 West 123rd Street, Palos Park, Illinois 60464
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The Village of Palos Park Asks Voters-  Should we ‘aggregate’ electrical energy for their benefit?

The Village of Palos Park is joining 118 other Illinois municipalities and 10 Counties of Illinois who are asking their voters if they should “aggregate” electric energy and seek bids to lower residents and small commercial businesses electric costs. Aggregation refers to combining many customers to form a larger buying group, in this instance for the purpose of buying electric energy. In the nineteen Illinois communities who have already aggregated there have been savings of 15 to 20% on the energy portion of the electric bill. In municipal electric aggregation, the municipality acts as a conduit to help its residents and small business concerns realize lower energy costs. ComEd will continue to bill each customer and will continue to repair any outages and maintain the distribution system. The Village has asked that a binding question be placed on the March 20, 2012 Primary Election Ballot:

“Shall the Village of Palos Park have the authority to arrange for the supply of electricity for its residential and small commercial customers who have not opted out of such a program?”

In 1997, The State of Illinois deregulated the electric industry. Under the plan, Commonwealth Edison who serves this part of the state no longer generates electricity for its customer base but retains the power distribution system. Since that time, electric customers are able to purchase power through any of the twenty-three (23) alternative retail electric suppliers approved by the Illinois Commerce Commission. The energy portion is typically around two-thirds of a total electric bill.

Since deregulation of the electric industry in Illinois, more than 75% of commercial customers have switched to buy power from suppliers other than ComEd; during that same time few residential customers moved to alternate energy suppliers. Because of this, the Illinois Legislature created a Public Act that would allow communities to leverage residential accounts by engaging in a process of ‘municipal aggregation’; allowing municipalities to solicit competitive bids from energy suppliers on behalf of the entire community. This process is similar in nature to the way a municipality receives the best deal for garbage service for its residents.

If the voters in Palos Park approve of the referendum in the March 20, 2012 election, the Village will be under no obligation to switch suppliers. The referendum only provides that the Village will seek competitive bids if approved by the voters. If the bid terms and pricing are not compelling enough to move the resident’s accounts over to a new lower cost energy supplier then the accounts will continue with ComEd’s energy supplier.
If the Village chooses a new energy supplier, the supplier is required to contact each account twice to offer the opportunity to “opt-out” of the new plan. If a residential or small business customer “opts-out” they will continue to purchase power through ComEd’s energy supplier.

Municipal Electric Aggregation Frequently Asked Questions

What is Municipal Electric Aggregation (MA)?
On August 10, 2009 Governor Quinn signed Public Act 096-0176 amending Illinois’ original electric deregulation legislation (1997). Until the law was amended only larger customers in the industrial, commercial and governmental sectors could take advantage of the cost benefits associated with deregulation. The new law provided municipalities with the ability to act as a bidding agent for their residents and small business electric energy.

MA is a process whereby local governments can aggregate or bundle residential and small business electric energy accounts and seek bids that are lower than the current energy charge on your electric bill. Currently the Illinois Power Agency, a governmental body that secures wholesale electric energy on behalf of the distribution companies – in our area that is ComEd.

Why is ComEd indifferent if we choose another energy provider?
Moving to another power supplier would have no impact upon ComEd. They currently do not produce your power, nor do they earn any income on the power they currently sell. The power is provided by a group of power companies that generate the power and deliver it to ComEd. ComEd then bills on their behalf, and passes 100% of the revenue back to the power generators.

What happens if the power goes out; who do you call?
You will continue to call ComEd for any service issues with their power service. It is ComEd’s distribution system and the portion on your bill on which they cover their costs and make their profits

Who will bill the customer?
ComEd will still be responsible for billing the customer. From an operating perspective customers would hardly notice any change to their billing, except for possibly the energy provider.

Does a resident have to participate in the Municipal Aggregation plan?
If the municipality moves forward with a lower cost supplier, but a resident does not want to participate, that resident may Opt Out of the program individually. The energy portion of their account will be returned to ComEd and charged the prevailing ComEd energy rates.

What is the process for municipal electric aggregation?
Under the state law, a municipality must place a referendum question on the ballot to ask its voters if they would like to grant the municipal government the authority to aggregate the electric accounts and seek bids for electric energy. If the voters approve the referendum, the municipality must hold two public hearings to discuss and create an aggregation plan. Once the plan is in place the electric energy would be bid out through a Request for Proposals (RFP). Only energy suppliers certified by the Illinois Commerce Commission can respond to the RFP. The bid that comes closest to achieving the goals of the aggregation plan would be accepted.

What if ComEd’s rates are lower than the power suppliers’ bids?
No action is taken. Your residents will remain with ComEd for the next 12 months.

How many businesses currently buy their supply from an alternative electric supplier?
Currently over 75% of large businesses purchase their electric energy supply from sources other than ComEd.
What rate savings can we expect our residents to see?

Results to date indicate a savings of more than 15% or $150 per customer annually. Nineteen communities in Illinois have implemented municipal electric aggregation. The results of their can be found on the Illinois Commerce Commission website (www.icc.illinois.gov/electricity). While the energy rate currently charged by ComEd is $ .0773 /kWh the vast majority of these communities have rates under $.06/kWh with the lowest being $ .0543/kWh.

Is the aggregate supply for residents competitively bid?
Yes. As municipal referendums have passed, the competition for suppliers has increased and forced them to “sharpen their pencils” and offer more competitive prices. According to the Illinois Commerce Commission website, as of December 30, 2011 - 119 municipalities (including Palos Park) and 10 Counties will have a referendum question on the March 20, 2012 ballot regarding electric aggregation.

How will the public question be asked on the March 20, 2012 election ballot?
“Shall the Village of Palos Park have the authority to arrange for the supply of electricity for its residential and small commercial customers who have not opted out of such a program?”

Where can we get additional information?

www.icc.illinois.gov/electricity/
www.electricaggregation.org
www.youtube.com/watch?v=lxJToltlwHU
 

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♦  Mayor: John F. Mahoney
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