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updated: 7/31/2014 4:44 PM

Elgin switching municipal energy supplier

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Residents and small business owners who take part in Elgin's electricity aggregation program will see prices increase as the city switches energy suppliers.

The city has entered into a 10-month agreement with Constellation Energy Resources starting Oct. 1. ComEd will supply electricity in August and September after the city's contract with Direct Energy expired Thursday, Assistant City Manger Rick Kozal said.

Electricity bills will continue to come through ComEd.

Energy prices have increased and municipal aggregation doesn't yield the savings it did even a year ago, Kozal said.

The city council voted 8-1 to enter into the contract with Constellation, an Exelon company, at a rate of 7.71 cents per kilowatt hour. Councilman Terry Gavin cast the dissenting vote.

The contract with Direct Energy had a rate of 4.9 cents per kilowatt hour, which saved residents an average of $300 over the course of the two-year agreement, Kozal said.

Most of the savings came in the first year and decreased considerably in recent months, he said.

The city solicited bids for the new contract and the city council picked what it felt was the best option for residents, Mayor David Kaptain said. Direct Energy did not submit a bid.

The council could have chosen to have ComEd continue to supply electricity after September, but the company couldn't guarantee a fixed rate, Kaptain said. ComEd offered a variable rate between 7.09 and 8.09 cents per kilowatt hour.

"If they ended up in the high range, it would cost more money," Kaptain said. "I felt it was safer, and council obviously agreed, to go with a guaranteed price for 10 months than to play with a moving target."

Residents and eligible small businesses will also be able to purchase "green," 100 percent renewable energy from Constellation at the rate of 7.89 cents per kilowatt hour, a component that is not available through ComEd, Kozal said.

"The city was able to secure a consistent and favorable rate through the contract while also providing renewable energy options that meet the needs of residents and small businesses," he said.

Residents will be mailed detailed information about pricing structure and options, Kozal said. Anyone can opt out of the aggregation program at no charge.

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