Power in numbers? Towns consider alternate providers

Updated 9/15/2011 5:00 PM

Libertyville officials, like those in a growing number of other communities, are considering actions that could lower electric bills for residents and small businesses.

The idea, known as electric aggregation, allows communities to seek bids for a lower-cost source of power, which accounts for about two-thirds of a typical bill.

In a community the size of Libertyville, the savings could amount to about $1.5 million a year, David Hoover, executive director of the Northern Illinois Municipal Electric Collaborative, explained Tuesday to the village board's special projects committee.

Company literature says residents would see their ComEd bills drop $175 to $200 per year.

A recent change in state law allows communities and counties to seek bids from power suppliers, but it is not a quick process.

A government entity has to pass an ordinance and then the measure must appear on the ballot as a referendum question.

Last April, residents in Grayslake, for example, voted overwhelmingly to pursue the idea. Hoover said his company is working with 15 of the 19 communities in northern Illinois that have already passed referendums.

If approved, all residents and small commercial users are automatically included in the customer base but can opt out once the bids are received and the new electric rate is identified.

ComEd, which distributes the power, would continue to bill customers regardless of the supplier, although the name of the power provider would change.

NIMEC works like a real estate agent in that it would work for the buyer -- in this case Libertyville -- but gets paid by the seller in the form of a broker fee by the power generating company.

Hoover said there are about 35 independent power suppliers in Illinois, about a dozen of them for residential use.

"I'm pretty sold on this personally," said Libertyville Trustee Jim Moran, who chairs the special projects committee.

The group directed staff to research options, as NIMEC is not the only company offering the service. It expects to make a recommendation in about a month.

Interest in the idea is growing. Buffalo Grove, for example, is leading an effort and is asking Vernon Hills, Lincolnshire, Wheeling, Palatine, Arlington Heights and Long Grove to collaborate.

Representatives from those communities met Wednesday to discuss whether to proceed and if so, whether other towns should be brought into the mix.

"We've had quite a few inquires from our residents regarding aggregation and we've had inquiries from other municipalities," said Buffalo Grove Village Manager Dane Bragg.

Bragg said the idea is to assemble a customer base of about 250,000.

"We're definitely taking a serious look at it and working with our neighbors," said Mike Allison, village manager in Vernon Hills.

Respective village boards would have to approve the idea.