Lake Zurich cautious on next electricity deal
While there have been noticeable savings for Lake Zurich residents and small businesses receiving electricity from a provider other than ComEd, officials are keeping their options open before the contract ends in July.
Lake Zurich has calculated that households saved an average of $247 in supply costs last year by receiving their juice from FirstEnergy Solutions rather than ComEd. Residential and small business customers could have opted out of the alternative provider contracted by the village.
Lake Zurich and a host of other towns received voter approval to participate in municipal electricity aggregation. The concept is that suburbs can use the collective bargaining power of residents and small commercial accounts to bargain for lower power prices from suppliers.
As part of a consortium with Crystal Lake, Yorkville and South Elgin, Lake Zurich has had a contract with First Energy for a 4.75-cent per kilowatt hour rate since July 2012.
ComEd charged 7.73 per kilowatt hour when the deal was struck in 2012. ComEd’s price later dipped to 6.005 cents, but it is projected to rise in June.
It’s unknown whether Lake Zurich will have another alternative supplier after its two-year contract with FirstEnergy ends in July, management analyst Kyle Kordell said.
“The reason for this is because it is too early to confidently say how the electric commodity market will fluctuate in the coming months,” Kordell said. “The village will proceed in the direction that is in the best interests of our residents, meaning we will lock in the lowest rate possible. This might be with ComEd or it might be with an alternative retail electric supplier.”
If Lake Zurich doesn’t renew with FirstEnergy or have another supplier ready when the current deal lapses in July, Kordell said, the village would automatically revert to ComEd. He said ComEd requires a one-year commitment, with a two-month window at the beginning for the village to find another power company if it desires.
Lake Zurich’s position received a thumbs-up from a statewide consumer watchdog group.
Citizens Utility Board spokesman Jim Chilsen said until now, electric aggregation was the best choice and communities moved quickly to secure lower prices since a 2011 Illinois Commerce Commission decision allowed the alternative providers to bill through ComEd. Because market conditions have “evened out significantly” since last June, Lake Zurich’s slower, more deliberate approach is appropriate, he said.
“Most communities have done a good job approaching aggregation, and consumers have benefitted,” Chilsen said.