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updated: 7/25/2014 9:38 AM

Editorial: Aggregation working, even as towns return to ComEd

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  • ComEd linemen work on an electrical pole. The utility's business is to deliver, not sell, electricty, but its supply rates are currently competitive.

       ComEd linemen work on an electrical pole. The utility's business is to deliver, not sell, electricty, but its supply rates are currently competitive.
    Daily Herald File Photo / Steve Lundy slundy@dailyherald.com ¬

 
The Daily Herald Editorial Board

Hanover Park officials have announced they will return to ComEd as the supplier of electricity for the village's residents. Previously, officials in Addison, Antioch and Lombard did the same.

Are these signs the end is near for vaunted electrical aggregation programs once hailed as the grand alternative to high ComEd energy rates?

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Quite the contrary.

In fact, the moves by these towns continue to demonstrate the success of a strategy that scores of communities throughout the suburbs have adopted since it first became available in Illinois in 2009.

Electrical aggregation enables a community to bargain for residential electricity on behalf of all its citizens. Any who choose can opt out and seek better rates on their own, but most find substantial savings because of the greater buying power of a large mass of customers.

When communities first began to buy energy through aggregation, their reasoning was generally that the process would enable substantial savings compared to ComEd, the traditional supplier with which most consumers in the suburbs are familiar and whose rates at the time were as much as 25 to 30 percent higher than rates available from other companies.

Two factors combined to create the disparity.

One, energy rates in the broad market generally had plummeted; and two, ComEd -- which does not provide energy but simply passes it along through its infrastructure at cost -- was locked into contracts of its own with energy suppliers.

Earlier this summer, prices for energy soared for all companies. Meanwhile, ComEd's previous contracts expired, enabling the utility to purchase electricity at the rates of the new market.

The net effect was that ComEd's cost for electricity changed very little, while that for other suppliers jumped substantially, making the utility's rates for communities that aggregate competitive with those of other energy companies.

ComEd, keep in mind, is not in the business of selling electricity. Its business is to deliver power, and it makes no profit on the energy it sells.

Will it always remain as competitive with other energy suppliers as it is now? Only the energy market can say, and that's the beauty of deregulation and aggregation.

Contracts for energy are expiring for many of the towns that joined the first wave of aggregation, and many communities have switched to new suppliers other than ComEd.

"The tide is changing every year," Hanover Park Trustee Bill Cannon told the Daily Herald's Katlyn Smith. "A year from now, two years from now, we may end up going back to a broker. It's all open."

Indeed it is. And the prime beneficiary is the utility customer.

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