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updated: 7/24/2014 6:48 AM

Another suburb returns to ComEd, drops alternative supplier

Hanover Park putting residents, businesses back on ComEd

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After using alternatives to ComEd for two years -- and cashing in on more than $1.7 million in savings -- Hanover Park residents and businesses will once again become customers of the utility heavyweight.

Hanover Park is one of 28 towns that have tasked the Northern Illinois Municipal Electric Collaborative with negotiating bids and ended up dropping alternative power suppliers. Addison, Antioch and Lombard also have returned to ComEd.

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In Hanover Park, the reversal is expected to add an extra $12 to $17 on the average homeowner's monthly electric bill. But officials say residents would have seen even higher prices if the village inked another pact with an alternative provider.

ComEd will charge 7.596 cents per kilowatt hour, up nearly 37 percent from the current 5.556 rate under the village's contract with Verde Energy USA.

"The lowest-cost option is quite a bit higher than today," said David Hoover, the collaborative's executive director. "That's not the village's fault. That's the marketplace."

Towns flocked to alternative suppliers a couple of years ago, when electric rates were falling. At that time, ComEd had long-term contracts to buy electricity at higher prices that prevented it from lowering its rates.

Since then, those contracts have expired, while the price for electricity has gone up, making ComEd once again competitive.

After ComEd, the cheapest rate was about 8.5 cents per kilowatt hour, put forward by Homefield Energy and Constellation Energy, Hoover said.

"The good news," Hoover added, is ComEd's rate won't take effect until Aug. 1, after much of the summer is over and with it the need for air-conditioning.

In October, ComEd's rate is set to drop to 7.42 cents per kilowatt hour, effective until May.

Expectations of that modest decrease factored into the decision of Antioch leaders to go "in a very safe direction" with ComEd, village Administrator James Keim said. Going with another supplier would have locked the village into a rate only slightly cheaper -- a fraction of a penny per kilowatt hour -- than ComEd's summer rate.

In Hanover Park, voters approved electrical aggregation in 2012, allowing the village to negotiate bids with alternative providers.

Since then, Hanover Park trustees have approved one-year deals with FirstEnergy Solutions and Verde Energy USA. The move resulted in more than $1.7 million in savings villagewide from September 2012 to February 2014, officials say. The average single-family homeowner saved $227.

But the prospects of more savings dimmed, prompting the village to suspend the electrical aggregation program, officials say.

"The tide is changing every year," said Hanover Park Trustee Bill Cannon, who cautioned against lengthy contracts with utility companies. "A year from now, two years from now, we may end up going back to a broker. It's all open."

Of the 75 communities working with the collaborative, 54, or roughly two-thirds, renewed contracts with alternatives to ComEd, Hoover said. Those towns generally have larger homes and use more power, benefiting from a "pricing bias" in a federal regulatory charge, Hoover said.

Those towns also went out to bid in March or April, when market prices were significantly lower, he said.

But suburbs with smaller homes like Hanover Park sought bids later in the spring after ComEd released its rates, in order to compare prices.

"We knew that pricing was going to be close," Hoover said. "... Coincidentally, the market was at a much higher level."

Hanover Park residents have until mid-October if they want to leave ComEd for another provider.

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