CUB's Guide to Municipal Electricity Aggregation
What Is Municipal Aggregation?
Illinois law allows municipalities and counties to purchase electricity on behalf of residential and small-business utility customers (businesses using no more than 15,000 kilowatt-hours of electricity a year) living within their borders. While municipalities choosing aggregation would be responsible for negotiating the price of power from a supplier other than the traditional utility, your utility would still be responsible for delivering that power to your home, and billing you for it. In theory, municipal aggregation allows communities to use the collective bargaining power of residents to negotiate for lower power prices from suppliers. See the list of communities that have moved forward with municipal aggregation or have a referendum on an upcoming ballot.
Who Purchases Electricity Under the Current System?
The Illinois Power Agency (IPA) is a state office that negotiates power prices on behalf of residential customers taking electricity supply from their utility. The agency buys power for the state’s two largest utilities, ComEd and Ameren, which then pass the cost of power onto their customers with no markup.
Would I Automatically be Billed at My Community's Rates?
Yes, unless you opt out of the program. If a community passes a referendum approving electricity aggregation, local officials will then put out a request for proposals (RFP) and select a winning bid. Then, officials may hold a community hearing to get feedback and input from residents. CUB supports a community’s right to buy electricity from an alternative supplier, in principle. However, it remains to be seen whether community aggregation will lead to real savings for consumers in the long term.
Residents who don’t wish to participate would have two opportunities to “opt out” of the program:
1. When the community sends out an initial letter notifying residents that their electricity supplier will change, and
2. when the utility sends customers a letter notifying them that their electricity supplier has changed. After receiving the utility notification, residents generally have 10 days to opt out.
So, even if your community passes a referendum, you don’t have to participate in municipal aggregation if you don’t want to.
If a community fails to pass a referendum but still chooses to move forward, the program would be “opt in,” where residents are not enrolled until they sign up. In any case, consumers always have the option of paying their utility’s default prices—those negotiated by the IPA.
Prices to compare
When considering a municipal aggregation deal, compared it to your utility’s price.
6.388 cents per kWh
6.514 cents per kWh for the first 800 kWh and 4.776 cents per kWh for usage above 800 kWh
Note: “Prices to compare” do not include the Purchased Electricity Adjustment (PEA), which changes monthly and can be a debit or a credit.
Who Do I Call If the Power Goes Out?
Even if you choose to participate in community aggregation, your utility—ComEd or Ameren—is still responsible for delivering the electricity you purchase to your doorstep. So if the power goes out in your home, you should call your utility.
Would I Get Two Bills?
In most municipalities, consumers will continue to get a single bill from their utility, but it’s not a certainty.
Will Aggregation Lower My Electric Bill?
Whether or not residents will get lower electricity rates would depend on the contract their community negotiates. If not, residents can opt out of the program. While municipal aggregation has been delivering savings to communities in the short term, long-term savings are not guaranteed.
The best way for a community to ensure long-term residential savings is not to solely rely on the market, but to include robust, creative efficiency measures in its energy plan. That will help reduce power usage at peak times, which cuts individual power bills as well as market prices. So far, CUB has not seen communities use aggregation as an opportunity to employ such efficiency measures. See a list of prices these communities have negotiated so far.
What Happens If I'm Already Enrolled With an Alternative Electricity Supplier?
So far, most communities have separated out individuals who are already under contract with an alternative supplier. It’s wise to check with local officials to learn what the process will be. The rate you’re offered through municipal aggregation may be better than what your current supplier is offering you. If you switch, however, you may have to pay an exit fee.
If I'm a Hourly Pricing or Power Smart Pricing Customer, Will I Be Able to Stay With the Program if I Opt for Municipal Aggregation?
ComEd’s Hourly Pricing and Ameren’s Power Smart Pricing programs allow customers to pay hourly market electricity prices, rather than the utilities’ fixed rates. Consumers who aren’t home during the day, when energy prices tend to be highest, or who can shift high-energy usage activities like laundry or running the dishwasher to off-peak hours, benefit the most. In fact, ComEd participants have lowered the supply portion of their power bills by an average of 15 percent. To date, no municipal power agreements or individual alternative supplier plans offer hourly pricing options, so if you would like to enroll or stay enrolled in hourly pricing, you’ll have to stick with your utility. Just like customers who are already enrolled with alternative suppliers, Hourly Pricing and Power Smart Pricing customers will likely be filtered out when residents are switched over to the community’s negotiated power supplier. Still, it’s an important detail to check.
Checklist: What Everyone Should Know About Municipal Aggregation
What price is the supplier offering and how does it compare with the utility’s price?
While it is a basic question, it is the key question for consumers: Will I save money with municipal aggregation? Ask community leaders to be clear about the price being offered and match it up with your utility’s “price to compare,” listed on the front page of this guide.
What if I want to leave the alternative supplier?
See if you can get out of a deal without having to pay an exit fee. Also, find out if the alternative supplier promises to meet or beat the utility’s price over the course of the contract, as some have.
What happens when my community’s power contract ends?
After your municipality’s agreement with an alternative supplier runs its course, will you automatically return to your utility’s rates, or will you become a customer of the alternative supplier your community contracted with? Check with your community leaders to find out.
Will my community factor energy efficiency into its power contract?
Reducing power usage, especially during peak hours, reduces electricity costs for everyone. Find out what energy efficiency and demand-response measures, if any, your community plans to include in its contract with an alternative supplier.
Will my community purchase Renewable Energy Certificates (RECs) to invest in “green” energy?
Many alternative power suppliers offer “green” plans, which ensure that a certain percentage of the power consumed will be put back onto the grid by renewable energy sources, like wind and solar power. Find out if your community plans to purchase RECs, and if it will cost you extra. Just remember, even if you purchase “green energy” from an alternative power supplier, it doesn’t mean the actual electricity you consume is from a renewable energy source—it just means that clean energy was added somewhere to the power grid.
Are consultants advising my municipality on community aggregation, and if so, what fee(s) are they charging?
Many communities obtain a consultant to seek out and negotiate power prices on behalf of residents. These consultants charge fees—taxpayer dollars—for their services. Make sure your municipality’s consulting fees, if any, won’t eat up your electric bill savings.
Does my community plan to accept fees from the alternative supplier it chooses?
Some communities take fees from alternative suppliers. If your community is considering such a move, ask local leaders how that impacts the price offered and what they plan to do with the extra money.