Elgin residents to see major savings with new energy supplier
Elgin residents and small business owners can expect electricity savings of about 37 percent starting this fall with a new energy supplier selected to replace ComEd.
Direct Energy Services has committed to a fixed rate of 4.915 cents per kilowatt hour for those who don't opt out of the electric aggregation program. Voters decided in March to allow the city to negotiate energy prices for them, when expected savings were just 20 percent.
Direct Energy also agreed Elgin customers would not be charged any early termination fees during the life of the two-year contract.
"If residents or small businesses are not happy with Direct Energy Services' pricing, they can revert back to ComEd or another supplier," said City Manager Sean Stegall in a prepared statement.
ComEd's average price per kilowatt hour is 7.73 cents but fluctuates throughout the year.
Elgin's contract with Direct Energy also calls for 100 percent renewable energy. The price per kilowatt hour could have been slightly less without the commitment, but Elgin officials decided it was worth paying tenths of a cent more.
"We're still saving people over 35 percent so we thought that was certainly in the best interests of the environment, and the community, too," said Colby Basham, public works superintendent.
Service will not be interrupted with the switch in supplier as energy will still flow through ComEd's infrastructure. ComEd also will continue to send the bills and respond to maintenance calls or power outages.
Only residents served by ComEd will be automatically enrolled in the new program and switched to Direct Energy Services. Those with contracts with other suppliers will need to discuss a transition with Direct Energy and their current supplier and they may be charged extra fees.
The City of Elgin will start collecting its new electricity tax July 1 and expects to see $2 million in 2012. Because the tax is based on energy usage, rather than a customer's overall bill, Chief Financial Officer Colleen Lavery said, revenue projections will not be affected by electric aggregation.
Officials estimate the city's tax would cost an average household $33.50 more per year, an amount that will be offset by energy savings through aggregation and also reflected in lower property taxes.
With the city's utility tax and ComEd's delivery fee included, the total savings for Elgin residents will be less than 37 percent on the monthly bills. But Basham said an average household could pay $250 less per year with the lower supply rates.
More details will be available at cityofelgin.org in coming weeks.
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