Suburbs team up to find lower electric rates

A ballot question next spring could lead to lower electric bills for residents and small businesses in seven area communities.

Palatine, Arlington Heights, Buffalo Grove, Lincolnshire, Long Grove, Vernon Hills and Wheeling have partnered to aggregate their power needs in an effort to cut costs by switching energy suppliers.

Voters in the March 20, 2012, primary election must first grant each municipality the authority to solicit competitive bids for electricity.

“This is a pure example of governments getting together to get a better deal and better leverage,” Palatine Councilman Kollin Kozlowski said.

From the customer’s perspective, nothing will change in the way electricity is delivered. Although the energy will come from one of about 20 suppliers approved by the Illinois Commerce Commission, ComEd remains responsible for service, reading meters, billing and restoring power in the event of an outage.

Residents would be able to able to opt out of any program and stick with ComEd if they wish.

What will change is the monthly bill, officials said. They’re following the lead of Grayslake, which teamed with Oak Brook and Lincolnwood to purchase energy from De Pere, Wis.-based Integrys Energy Services.

Effective Jan. 1, about 16,000 eligible customers in that trio of communities are expected to save 29 percent in residential usage charges and 30 percent in commercial charges.

That’s based on fixed rates Integrys locked in through 2013 of 5.52 cents per kilowatt hour for residential and 5.45 cents for commercial. ComEd’s rates were 7.733 and 7.768 cents, respectively, said Mike May, assistant to the Grayslake village manager.

A condition is built into the contract that if ComEd rates drop below Integrys’ rate, the Wisconsin company will either match the rate or return customers back to ComEd. As of Tuesday, only 112 of about 8,500 customers in Grayslake have opted out of the program, May said.

“It will be a totally seamless transition,” he said.

The same safeguard will be in place for the seven municipalities going to referendum next spring. If the cost savings are only nominal, nothing mandates them to accept a bid.

Buffalo Grove Village Manager Dan Bragg said it wouldn’t be economical to pursue a cost savings program alone, so officials there reached out to Vernon Hills because of its similar demographics and households. The others soon followed and Bragg anticipates more may show interest.

The combined population of the seven communities is about 263,000, which Palatine Village Manager Reid Ottesen said is an ideal size to maximize buying power.

“We wanted to strike a balance of wanting to have large enough numbers to attract a lot of bidders, (but) not be so big that some of the smaller providers might not be able to meet the energy need,” Ottesen said.

After each board passes a resolution to go to referendum, they’re expected to form an intergovernmental agreement to achieve the greatest buying power. They’ll also consider whether to hire a consultant to assist with the bidding process.

A minimum of two public hearings is required, and officials say they’ll launch a public information campaign before the election.