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Municipal Electric Aggregation


UPDATE: Electric Aggregation- All Bids Rejected

In September, the Village bid out electric rates for residential properties and small commercial users.  All bids came in higher than existing ComEd supplier rates.  As such, the Village opted to allow the rates to return to ComEd rates starting February 2015.  Next September, the Village will rebid rates to protect residents.  Residents will still be allowed to independently  shop third party  rates on their own and are encouraged to do so.  However, the Village recommends prudence on the part of residents as some contracts contain confusing language, high cancelation fees, variable or increasing rates.  
 
Since implemented through a referendum in November 2012, electic aggregation has saved residents of Clarendon Hills over $500,000 in comparison ComEd Supply rates.  Due in part to competitive pressure, ComEd has reduced rates and amended rate setting practice to allow for a more adjustable rate during the year.  Now ComEd is allowed to float approximately $.005 per kilowatt hour monthly above or below rate and is allowed two rate setting dates (one in October, one in June).  This flexibility has allowed ComEd to undercut much of the municipal aggregation market, and many communities have returned to ComEd.

 

On November 6, 2012 residents voted to allow the Village to  pursue lower electrical rates for residential and small commercial customers. Municipal electric aggregation allows a municipality to contract directly with an energy supplier for a supply rate that is lower than what ComEd currently offers. 

The Village distributed requests for proposals from qualified retail electric suppliers following the approval of the referendum. On November 20, 2012 the Village entered into a contract with Constellation NewEnergy to provide electric suppy for most residential and small business customers. The supply rate is 5.313 cents per kWh for a term of 24 months. This compares to ComEd's current rate of 6.5 cents per kWh. Residents will also have the option to purchase 100 percent "green" energy at a rate of 5.388 cents per kWh. Residents who wish to remain will ComEd will have the opportunity to opt out of the program.
 

How can I enroll in the program?
You need do nothing if you have an eligible resident or small commercial electric account; you will automatically be enrolled unless you opt out.

What is an eligible resident or small commercial account?
Any resident who is currently with ComEd and has not already switched to an Alternate Retail Electric Supplier (ARES) or who is not enrolled in a special Residential Real-Time Pricing (RRTP) program is eligible, and small commercial accounts are eligible. You must also have a residence or business located in the Village of Clarendon Hills.

What is a “small commercial account?”
A small commercial account is defined by the ICC as a commercial account using under 15,000 kWh per year.

What if I don’t want to be in the program? 
You may opt out before the program begins. All eligible resident and small commercial ratepayers will receive an opt out notice. They must sign and return the notice as directed within the letter within the 14-day opt out period if they do not wish to be in the program. Otherwise, they will automatically be enrolled.

I am located in Clarendon Hills’ Village limit, have already switched to another ARES, but would like to join the program. Can I do this?
Yes. Contact Constellation directly to enroll (1-800-718-1493). You are advised to check your current contract to review any early termination fees for which you may be liable. You may wait for your current contract to expire before enrolling in the aggregation program. You may join the program at any time during the two-year contract, for no fee. Please be aware of ComEd's stay requirement, however. It is advised that you remain with your ARES until the Constellation Program has been implemented in order to avoid the stay requirement.

 

What is ComEd’s 12-month “stay” requirement?
Please note ComEd regulation prohibiting customers from switching accounts frequently. If your account was with an ARES and you moved back to ComEd more than two months ago, you are under a 12-month “stay” and may not switch to a new supplier for that period. If you are automatically enrolled in the Village’s aggregation program, and later switch back to ComEd, you must switch to a new supplier within two months or you will be subject to that 12-month stay. If you have never chosen a supplier and choose to opt out of the aggregation program, you are not under a 12-month stay and may switch to another supplier at any time.

I am on ComEd’s residential space heating rate of 6.997 cents per kWh. How do I benefit?
At the Clarendon Hills’ aggregation program rate of 5.313 cents, you may save 24 percent off the ComEd rate.

 
If I am automatically enrolled in the program now, can I leave the program at any time?
Yes, you may leave the program and move your account back to ComEd or another ARES, and at no early termination fee. 
 
When can I expect to begin saving money?
Your account will be enrolled in the aggregation program sometime early 2013, with the savings reflected on the following month’s bill.
 
What is the history of electric aggregation?
The Illinois General Assembly began deregulating electric supply in 1997. Since that time, commercial consumers and, more recently, residential consumers have been able to independently purchase power from a third party, known as Alternative Retail Electric Suppliers (ARES). In 2009, Governor Quinn signed Public Act 96-176 that allows municipalities to negotiate for electric supply on behalf of residents and small businesses, commonly referred to as municipal electric aggregation.
 
What impact does aggregation have on ComEd?
The local aggregation program will not affect how consumers receive electricity, report outages or pay bills. ComEd, which manages the delivery system, but does not generate electricity, will continue to be responsible for the electricity infrastructure, billing and consumer response. As a result, aggregation will have no impact on the reliability of the electric system, either positive or negative.

Is my commercial account included in the aggregation?
Only very small commercial accounts in the category of 0-15,000 kWh annual use are included. The program includes “small commercial” accounts, and the ICC has defined small commercial to include only those business accounts using under 15,000 kWh per year.

What happens if the power goes out? Whom do I call?
You should always continue to call ComEd with any service issues. ComEd will still deliver your electricity. Constellation is the electricity supplier. (ComEd is no longer an electric supplier; they only deliver the power, and maintain the network of wiring, stations, etc.)

Will I get two bills?
No. You will continue to receive a bill from ComEd, and will remain on any budget billing payment plan you currently have. You will still have an account with ComEd. The only difference on your bill is the new lower rate and Constellation will be listed as the supplier. The transition of power supply to the new ARES is expected to be seamless; you would observe no change in your supply. 

What savings can I expect to receive?
The Village's new electric supply rate is 39.8 percent lower than the current ComEd rate. Based on average electricity usage in Clarendon Hills, this results in an average savings of $458 annually. Individual savings may be more or less depending on electricity usage. These rates will be in place for 24 months, however in the event that ComEd's rates were to fall below the supplier rate of 5.313 cents per kWh, the Village has the ability to end the contract and return customers to ComEd. The electric market prices are not static, and the Village cannot project the trend of rates in the future.

 

What if the ComEd rate drops below the Village’s contracted rate at some future time?  
The Village of Clarendon Hills entered into a contract with Constellation that offers price protection with the two-year fixed rate. Constellation will match the ComEd rate, should the ComEd rate drop below the contracted rate during that period. You may leave the program to enroll with another ARES at any time, without incurring an early termination fee.

Will someone come to my home or call to sign me up?
No. You need do nothing to automatically be enrolled in the program. If someone contacts you, requesting your ComEd account number and claims to be representing the Clarendon Hills program, please report such activity to Village Hall or file a complaint with the ICC at http://www.icc.illinois.gov/consumer/complaint.

What is the length of the Village contract? How long will I receive this rate?
The Village entered into a 24 month contract with a rate guaranteed for that time frame. Municipalities across Illinois have contracted electric supply rates for residents between one and three years, with the typical community contracting for a term of 2 years. The rates are fixed and do not float. Electric supply rates achieved through ComEd are also fixed and are adjusted once each year for the period June 1 through May 31 of the following calendar year.

What will happen after the first contract term? 
Following the initial contract term, the Village would either enter into another electric supply contract using the same biding process or return power to ComEd, depending on the market situation. In addition, there may be other market changes or other issues that arise during the first contract term that would cause the Village to re-evaluate the program. The goal of the current aggregation program is to bring the best available electric supply rates to eligible customers. That goal would continue in the future. However, due to market fluctuations, it is not possible to predict what that rate would be.

I am getting offers from retail electric suppliers to switch for lower rates. What should I do?
If you switch your electric account to a new supplier prior to the aggregation program, you will not be included in the community aggregation. If you switch to a new supplier, and later want to join the community aggregation, it is possible you may have to pay a termination fee. Be sure to review the details of the offer. If you do not switch to a new retail supplier, you will automatically be included in the aggregation program.

Will I still be able to participate in the PIPP and LIHEAP low-income assistance programs?
Yes. If you are currently receiving low-income assistance through these programs, the aggregation would not change your status. You may continue to participate. Should you sign up with an alternative electric supplier outside of the Village’s aggregation program in your own individual contract, however, you would no longer be able to enjoy these low-income assistance programs.

What if I am enrolled in ComEd's real-time pricing program?
Customers in ComEd's real time pricing program are automatically excluded from the program. However, you may choose to still opt-in if you believe it will be advantageous for you. Because of the way the program works, it is difficult to compare what cost savings a real-time pricing customer would see under aggregation because of the changes in the electric market pricing. A customer could compare their average cost per kWh from the previous year versus the aggregation rate, however the past year's rates are not a guarantee of the next year's rates.  

Are other municipalities engaging in municipal aggregation programs?
Yes, in 2011, nineteen Illinois municipalities began the first municipal aggregation programs in the State. In the March 2012 election, an additional 245 municipal bodies passed referenda to undertake municipal aggregation programs for their communities. Over 1.5 million residents in northern Illinois have successfully switched to new, lower cost power suppliers through municipal aggregation programs and are today saving money on their electric bills.

If you have additional questions about Electric Aggregation, please contact Zach Creer, Assistant to the Village Manager, at 630-286-5402 or zcreer@clarendonhills.us
 

Additional Resources
Citizen's Utility Board Guide to Electric Aggregation
ComEd's web page on Electric Aggregation

Additional Materials

Operation and Governance
Electric Aggregation Press Release
E
lectric Aggregation Presentation (PowerPoint)
E
lectric Aggregation Press Release 11-7-12