Warren High wants electricity offer to boost coffers
Warren Township High School stands to collect $50 for each new customer who signs up for a minimum of about 90 days with an electricity provider that'll beat ComEd's rate at least until May.
Some industry experts say Gurnee-based Warren District 121's power offer appears to be breaking new ground at the elementary or high school level. University of Illinois has had a similar program with Fighting Illini Energy since April 2011.
In the end, the offers are a way for supporters of a particular school to provide financial support by paying for a service they already have and need, proponents said.
But a spokesman for a statewide utility watchdog organization said consumers should look at the fine print before switching to an energy provider so a high school can receive a $50 donation for each new customer, as in Warren's case, or to generate athletic department donations, as for U of I.
"I'm surprised more companies aren't doing this," Citizens Utility Board's Jim Chilsen said. "It's a provocative sales pitch."
State deregulation of electricity made possible District 121's deal, which is open to residents, employees, parents and guardians of students. Warren's boundaries include about 61,000 residents.
MidAmerican Energy Co.'s price through the Warren special is 6.39 cents per kilowatt hour, which is fixed through December 2013. ComEd's price of 7.73 cents per kilowatt hour, which is 24 percent higher, is set through May.
No enrollment or cancellation fees are charged to MidAmerican customers.
Warren officials said MidAmerican's policy means Gurnee residents would be free to opt for even cheaper electricity without penalty. The village of Gurnee, pending voter approval in a March 20 advisory referendum, would join a power consortium with potentially less expensive monthly rates than MidAmerican.
"It seems like a good idea to me," Warren school board President John Anderson said at a recent meeting. "I'll try it out."
MidAmerican spokeswoman Tina Potthoff said the company will contribute the $50 to Warren on behalf of every new customer who stays with the service for at least three billing cycles, which amounts to roughly 90 days. She said the Iowa-based company doesn't have any restrictions on how District 121 uses the cash.
MidAmerican started pitching the program in January to 80 Illinois schools, along with religious and other organizations. Warren, which has bought its electricity from MidAmerican for the past two years, was the first school to accept the offer.
"This program is simply a resource that MidAmerican Energy offers to already-existing customers," Potthoff said.
District 121's assistant superintendent of business services and operations, Carol Rogers, said there are no estimates on what the school might reasonably receive from Mid-American.
"What prompted us to do it was to save money for our residents and, at the same time, receive some financial support," Rogers said.
District 121 board members voted 6-0 last month in favor of linking with MidAmerican Energy for the promotion that's touted on the school's website as a "residential electric discount program," but no specifics have been laid out for what would be done with the company's donations. A company flier includes the Warren Blue Devils logo.
CUB examined District 121's offer at the Daily Herald's request. Chilsen said MidAmerican doesn't guarantee always beating ComEd's price, unlike energy programs from some suburban consortiums and the regional Metropolitan Mayors Caucus.
However, while the Metropolitan Mayors Caucus program is offering a recently reduced price of 6.1 cents per kilowatt hour, it requires a two-year commitment and carries an early-exit fee. Power through the mayors group is about 5 percent cheaper than MidAmerican's 6.39 cents.
To ensure they are never paying more than what ComEd charges, Chilsen said, consumers who take the Warren deal for MidAmerican will need to monitor kilowatt-hour prices.
"It's more complicated to be an electricity consumer," he said.
Chilsen said ComEd's kilowatt-hour charge is expected to drop when it is re-established in May. He said the Warren deal would save a typical customer about $32 until ComEd's new kilowatt-hour rate is set.
Residential and business customers across the state can support University of Illinois' athletic department by switching to Fighting Illini Energy. Its basic rate is 7 cents per kilowatt hour, which for now beats ComEd's 7.73 cents.
Texas-based Branded Retail Energy handles U of I's program. Branded spokeswoman Elizabeth Bilton said about $5 on behalf of every residential customer and a "percentage of margin" from business accounts are donated monthly to Illini athletics.
Although Branded is in similar ventures with four Texas universities, Bilton said, the company hasn't gone to elementary or high schools yet. She said Branded is studying other opportunities in Illinois, but declined to be specific.
"You will continue to see this in the market as it develops," Bilton said.
Fighting Illini Energy is expected to bring in a six-figure sum annually for the university's intercollegiate athletics, officials said. Customers have received opportunities for game tickets, special offers on Illini gear and other perks, according to a U of I announcement.