Election Day Primer: Electrical Choice Referendum
Consortium of north suburbs will ask voters whether or not they should seek bids for an alternate electric supplier to ComEd.
Amid a slew of local races and the Republican primary, there’s one issue on the March 20 ballots that could impact every voter’s wallet: electrical aggregation.
The municipalities of Northbrook, Deerfield, Glencoe, Highland Park, Lake Bluff, Lake Forest, Park Ridge and Skokie have formed a group called the North Shore Electricity Aggregation Consortium. Voters in each community are being asked if they want the consortium to act on their behalf by bundling electric accounts and seeking bids for electricity on the open market rather than continuing to buy power from Commonwealth Edison.
Passed into law in 2009, the option of “electrical aggregation” allows villages to pool residential and small business accounts, combine forces with other municipalities and seek bids from alternate electric providers to ComEd in order to negotiate a better rate.
In Illinois, the majority of electricity, 58 percent, originates from nuclear power, according to ComEd figures. Coal-fired power plants supply 34 percent of the state's electricity and natural gas-fired plants produce 5 percent. Combined, alternative forms of energy like wind, biomass and hydropower, account for a scant 3 percent.
Since the law was passed, at least 19 Illinois communities have entered into agreements with alternative electric suppliers, which require a community vote by referendum. Several hundred more are considering a vote this year.
The villages of Grayslake, Oak Brook and Lincolnwood, for example, have already gone out to bid as a group, and were able to save their residents and business owners more than 25 percent on the supply cost of their electric rate, according to Oak Brook village manager David Niemeyer.
If the referendum is passed, the consortium will seek bids from one of 25 electricity suppliers approved by the Illinois Commerce commission. It will ask suppliers to submit one-, two-, and three-year contracts in hopes of giving residents the cheapest option. If no option is cheaper, the consortium—or any member of the consortium individually—can decide not to go forward with the contracts.
All bidders must offer at least 7 percent cleanly produced energy as part of their supply, according to state law. The elected officials in each town can then choose to mix their energy supply so that a higher proportion is cleanly produced—or stick with the least expensive option.
In each community that the program is passed, residents will still be able to opt out and remain with ComEd by contacting the utility during a specific time period. Under any scenario, ComEd will remain the distributor of electricity. That means that customers with outages will still call ComEd to report the loss of power, and bills will still come from the same place. As local officials have pointed out, the program would have no affect on ComEd’s reliability—simply on the portion of the electrical bill that accounts for supply costs.
Under the agreement, any member of the consortium can reject the bids at any time if they do not want to move forward with the process. The consortium is moving toward early selection of a supplier, in hopes of getting to the market ahead of the more than 300 other communities pursuing electrical aggregation on the March 20 ballot, according to Phil Kiraly, assistant manager for the village of Northbrook.
Currently, any resident or business owner can drop ComEd as a supplier and purchase electricity on an individual basis from one of 23 alternative companies approved by the Illinois Commerce Commission. In each community where voters pass the referendum, government officials will hold public hearings on the parameters of the program before seeking bids from suppliers.
If the referendum passes, the consortium expects to seek bids this spring with new rates going into effect sometime during the summer.