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10 Things To Know About Electrical Aggregation

On Tuesday, Oak Forest residents will be asked if to decide if the City of Oak Forest should look for cheaper electricity suppliers. Here are a few questions (and answers) about what they might mean.

In 2009, Illinois government passed a law that would allow municipalities to put electricity supplying out for bids to find a competitive rate, so long as the residents were in favor of doing so through a referendum vote.

On Tuesday, the following question will appear on the March 2012 Primary ballot for residents.

Should the City of Oak Forest have the authority to arrange for the supply of electricity for its residential and small commercial retail customers who have not opted out of such program?

Do electricity suppliers actually manage electricity going to my home and businesses in the area?
No. Suppliers provide the energy source and manage that end. A distributor is who is in charge of the actual electricity getting to a home or business. ComEd will remain the distributor.

So ComEd would still be maintaining the lines?
Yes. They still will deliver the power. Their responsibility is to deliver the electricity. ComEd does not earn money on power generation.

What if the chosen supplier declares bankruptcy?
Power supply would not be interrupted. The power supply would default to something called a Provider of Last Resort (POLR). Electrons are still being pushed through a countrywide grid, she said—only the generator of the power would change. The city's contract with the then-bankrupt provider would be null, and rates would default to those set by the POLR.

What if (assuming the referendum passes), someone stays on the aggregation plan, but changes their mind and wants to leave six months later?
A provision would be written into that contract that residents can leave or come back any time, with no termination fee, according to the Northern Illinois Municipal Electric Collaborative. The idea is to never ding the residents with fees. Should ComEd's rates suddenly drop lower than the contracted provider, the accounts would be relinquished back to ComEd, or go back to the POLR.

Does the city need a minimum number of accounts to aggregate?
No. The referendum needs to pass with a majority of the votes—if 100 people vote on it, 51 votes in favor will mean it's a go. Residents will have two opportunities to opt out of the aggregation before it actually goes into effect.

Do I have to do this?
No. Even if the referendum passes, residents will have the option to stick with ComEd or find their own supplier. And if residents decide later that they’d rather be a part of the aggregated supplying, they can enroll later.

How many years would this be set for Oak Forest?
Typically, the villages NIMEC has worked with thus far have gone with two years. It allows room for adjustment, should the market change.

What communities are already doing this?
Glenwood, Oak Park, Oakbrook, Grayslake, North Aurora and Elwood. Mokena, Orland Park and South Chicago heights are all considering it.

How does your agency get paid?
NIMEC is paid a percentage from the contracted amount from the winning supplier established by the deal with the city.

What do you mean by ‘aggregated?’
By going out to bid for the energy supply of as many residences and small businesses as possible, the city has a chance to purchase a cheaper rate. ComEd charges a rate set by the Illinois Power Agency. Here are a few examples of rates offered by other energy suppliers.

Curious about other residents' opinions on electrical aggregation?

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