Village releases fact sheet on electric aggregation

LOMBARD, Illinois—With the referendum on municipal electric aggregation set for March 20, the Village of Lombard is providing educational information for residents regarding this subject.

What is Municipal Electricity Aggregation?

Municipal Electricity Aggregation (MEA) is an opt out program that allows local governments the option to bundle together, or aggregate, residential and small commercial retail electricity accounts and seek bids for a cheaper, and possibly cleaner, source of power. Right now, customers obtain power at a fixed rate, regulated and set annually by the Illinois Commerce Commission. In contrast, large industrial and commercial customers can utilize the open market to obtain a lower rate and save money on their electricity bills. By bundling residential and small commercial accounts, municipalities can achieve the same type of savings.

What Are the Benefits of MEA?

The most important benefit to MEA is the opportunity for Lombard residents and small businesses to save money on their electric bills. Individual accounts could save between 20 and 30% off their bills. There are also opportunities for helping the environment by requiring renewable energy as part or all of the electricity supply or by funding energy efficiency programs.

How Does MEA Work?

Municipal Electricity Aggregation was made available by new legislation in 2010. First, the Village must place a referendum on the March 2012 ballot asking voters to give the Village authority to create an aggregation program. Once the referendum is approved, the Village will, with public input, create an aggregation plan that includes procedures and goals for the program. The Village will then seek bids from Retail Energy Suppliers to obtain competitive electricity rates for participants. If no bids are acceptable, there is no obligation to accept them. A resident or small business can choose to opt out of the Village's program, so there is little risk that your electric rate will increase and no obligation to participate.

What are the impacts?

The impact of MEA is primarily savings. Participants will not see a change in their bill other than a reduction on the energy charge. They will continue to receive a single bill, make one payment, and continue to receive all other services through ComEd. However, if customers are already purchasing their power from a company other than ComEd, they will be ineligible to take advantage of the Village's aggregation rate. A resident or small business can join the Village's program at any time, but early termination of a contract with another energy supplier could result in fees. Check the terms and condition of the contract with the retail energy supplier.

FAQs

Q: When will aggregation go into effect?

A: Before the Village can begin implementing the program, voters must approve a referendum on March 20, 2012 to allow municipal electricity aggregation. If the referendum passes, the program will likely begin August or September 2012.

Q: What component of my electrical bill will aggregation effect?

A: Aggregation addresses only one of the three components of an electricity bill. The three components are supply (where the power comes from), transmission (getting the supply from its point of origin or from the high voltage grid), and distribution (getting the electricity from the substation to the consumer's meter). Aggregation concerns only the supply component, which is typically 60 to 70% of the electricity bill. The transmission and distribution parts of the bill will be unaffected by aggregation.

Q: When will I start seeing a reduction in my electricity bill?

A: The earliest participants would receive bills with the new rates is August or September 2012.

Q: I have received mail from retail electric suppliers offering lower electricity rates now. What should I do?

A: The earliest the Village's aggregation program is likely to begin is summer 2012. Consumers who decide to switch to a retail electric supplier before the Village's program is available should consider several aspects of the retail supplier's offer.

What to look for in the offer:

1) Length of contract

• Many retail suppliers require a minimum 1-year contract, which would prevent a customer from getting the Village's aggregation rate until the contract ends.

2) Termination fees

• Look at the cost of early termination. Some companies charge fees and others do not.

3) One bill or two?

• Under the Village's aggregation program, participants will still receive one monthly bill from ComEd and make 1 payment to ComEd. Some retail suppliers do not have this provision meaning customers may receive their regular bill from ComEd and a separate bill from the retail supplier.

Q: Do I have to participate in the Village's aggregation program if I do not want to?

A: No. Residents and small businesses are free to opt out. Opt out notices will be provided through the mail before the program begins.

Q: Who will I call if I have problems with my power or my bill?

A: All service and billing questions will continue to be directed to ComEd.

Q: How can I get more information about Lombard's aggregation program?

A: The Village's website will feature all materials related to the referendum and the aggregation program as soon as they become available.

Q: If I heat my home with electricity, can I save money with electricity aggregation?

A: Probably not. Residents who heat their homes with electricity already have a discounted rate structure, and electricity aggregation may not save them money on their electric bill. If you are considering switching, it is important that you evaluate your annual usage and the rate being offered through aggregation in order to determine what electric supply option best suits your needs. For more information, go to the Illinois Commerce Commission web site, Plug In Illinois and click on “Utility Space Heating Rate.”

Q: How can I get more information about electricity aggregation in general?

A: Contact the Village of Lombard's Finance Department at (630) 620-5910. The following websites also offer information and resources: Illinois Commerce Commission: Plug In Illinois and the Illinois Municipal League.