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Illinois law provides communities the opportunity to collectively purchase electricity from the lowest bidder rather than paying whatever ComEd charges. Evanston voters will decide whether to take advantage of the program, called “Community Choice Aggregation,” by referendum on March 20, 2012, after City Council voted to do so at its Nov. 29 meeting. They suspended the rules in order to pass the ordinance.
The move may have been brought about in part by frustration with frequent power outages across the City, often at the merest hint of storm activity. Aggregation, however, will in no way address that problem as the delivery of power to homes will remain ComEd’s responsibility even if aggregation is chosen. Evanston cannot be free of ComEd that simply.
Based upon savings realized by other communities that have chosen aggregation, the City estimates savings of about 20 percent on the supply portion of citizens’ power bills. Listed on the standard ComEd bill as “Electricity Supply Services,” supply charges represent between about half to 60 percent of the average power bill, meaning aggregation could result in savings of 10 percent or more off every citizen’s electric bill.
The Village of Oak Park recently decided on aggregation, according to materials prepared by sustainability coordinator Catherine Hurley, and chose to purchase only renewable energy. The Village was able to lock in rates 25 percent lower than rates charged by ComEd. While staff was reluctant to guarantee such savings, the opportunity to lower everyone’s power bill is real.
Currently, ComEd buys power from suppliers at rates established by the Illinois Power Agency. ComEd passes that rate along to customers without markup at rates currently between 6 and 8 cents per kilowatt hour. With aggregation, the City would negotiate the rate its citizens pay for electric power. Information provided by City staff shows negotiated rates between 5.43 and 6.23 cents per kilowatt hour in other communities.
Under the law, citizens are also free to negotiate with other suppliers on their own. Anyone can pick up the phone and find another supplier, and those who do so may opt out of the City negotiated rates if they so choose. During Citizen Comment, community activist Betty Ester said that she had found a supplier at a rate of about 5.4 cents per kilowatt hour.
The City can also choose to purchase energy from renewable sources, a decision which could result in slightly higher rates. Doing so does not mean that the power supplied to Evanston comes from windmills and solar plants, though, said Alderman Don Wilson, 4th Ward. Rather, the City’s power still comes from coal and nuclear plants but the City would buy green power elsewhere through a credit-swap program. In effect, the City of Evanston would buy green power used by another community while a community seeking lower rates regardless of power source would be buying the City’s coal- or nuclear-generated supply.
The City discussed joining forces with neighboring communities such as Skokie and Highland Park to “form a consortium and jointly arrange for the supply of electricity for their residents and small businesses,” according to the staff memo. The City ultimately declined to participate, in part, said City Manager Wally Bobkiewicz, because the consortium was represented by a law firm with “less experience” than the City wanted, and in part, according to the staff memo, because of “the City’s past success with energy procurement and strength of internal staff resources.”
If residents pass the aggregation referendum, the City will seek proposals from suppliers, review them, and if favorable rates are offered make a choice. Ms. Hurley said the process would be complete, and the lower rates locked in, by about August 2012.