Suburbs working to flip switch on electrical supply
Though suburban residents voted largely in favor of electricity aggregation in referendums Tuesday, the process of translating that into customer savings won’t be as quick or simple as flipping a switch.
Officials in many suburbs are getting to work researching how to obtain the lower rates the majority of their residents asked them to find. But it’s likely to take until September for customers to notice a change on their bills.
Among the legal requirements each affected municipality must handle first is the drafting of a plan of governance and the scheduling of two public hearings on it, Barrington Public Works Director Dennis Burmeister said.
While each village and city will be addressing these at its own pace, Burmeister said Barrington intends to work out the plan in April and hold its public hearings in May.
At the beginning of June, ComEd will reveal its pricing for the year ahead, which should allow for competitive bidding to start.
Once a municipality chooses its supplier, it should take 60 days to begin receiving power from that company, Burmeister said. Customers that want to continue to use ComEd as a supplier can opt out of the change.
During the bidding process, municipalities may group together to negotiate for better rates. Altogether, 104 suburban communities have hired Prospect Heights-based Northern Illinois Municipal Electric Collaborative (NIMEC) as a consultant to help navigate Illinois’ newly deregulated electricity market.
NIMEC’s Director of Marketing Sharon Durling said one area the collaborative can help is in recognizing where banding together two or more communities could lead to lower rates. Similarities in power demand is what often makes communities good partners on a contract, she added.
However, there will be many aspects of the proposed contracts apart from the rates themselves that could be seen as attractive or unattractive to different communities, including length, terms of withdrawal and other service issues, Durling said.
One thing customers have to keep in mind is that there are three different contributors to an electricity bill — the supplier, the distributor and government taxes — and electrical aggregation involves only the supplier cost, Burmeister said.
Nevertheless, supply accounts for between 60 percent and 70 percent of the bill. So a 30 percent savings on supply could translate to approximately 20 percent on the overall bill.
Barrington’s Burmeister believes savings of about 15 percent on a monthly bill are possible. And over the course of a year, that could be significant. “We’re excited.”
Durling said customers in most towns should expect to see changes to their bills around September. She’s heard estimates of June in some places, but doesn’t think that’s realistic.
While 74 percent of Barrington voters supported the referendum, Burmeister wondered if communities with close votes would feel the same mandate to schedule public hearings and aggressively pursue a new supplier.
In Woodridge, where 54 percent of voters backed aggregation, Management Analyst Jack Knight said village officials are waiting until election results become official next week before deciding their course of action.