City: Electric Bills Could Drop $300 a Year

Oak Forest will push ahead with an electrical aggregation plan, which is expected to drop rates by allowing the city to find a new electricity supplier. Two aldermen raised some objections to an added cost for green energy credits.

Don't expect the ComEd name to go away but city officials are expecting electric bills to decrease as the hunt begins for a new electricity supplier.

On Tuesday, the authorized in a 5-2 vote the aggregation of the city's electrical load and put in place a plan to find a new electricity supplier. One of the first steps is to go out to bid on May 10.

Voters passed a referendum on March 20 that asked if they wanted to allow the City of Oak Forest to have the authority to arrange for the supply of electricity—known as .

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The City estimates homeowners will see an average savings of $300 per year, based on what has been seen in other communities who have adopted similar plans.

ComEd will remain in charge of billing and maintaining the electric grid, including handling calls about power outages. ComEd no longer generates its own electricity and, instead, has it supplied by third-party providers and its parent company, Exelon Corp.

Residents will be able to opt out of, or back into, the aggregation if they choose. The City also could negotiate a rate guarantee which would require a new supplier to lower its rate if it begins to exceed ComEd, or allow the City to revert back to its old service.

The action on Tuesday also authorizes the City Administrator to accept one of the bids for a new supplier. Troy Ishler, who has been the city's director of Public Works, was appointed the vacant City Administrator position also on Tuesday.

Based on recommendations made by Ishler, the city will seek a two-year contract with a new supplier.

Check back with Oak Forest Patch for the complete story on Ishler's appointment.

A Matter of $10

The two dissenting votes on the council came from opposition over how to pay for renewable energy credits.

In searching for a new electricity supplier, Oak Forest has the option to find bids that, for an additional cost, will provide power from clean energy sources. The costs, based on estimates received by Oak Forest, put that cost at about $10 for the average household per year.

Defenders of this measure argued that this wasn't an added cost to consumers, that it merely reduces the total savings that are estimated for customers.

Second Ward Alderman Rich Simon took exception to the line of thinking.

"That’s taking money out of their pockets and not given them a choice," he said.

Both Simon and 7th Ward Alderman Mark Keating raised concerns about taking away the individual choice of consumer to decide whether they want to accept clean energy sources for the added cost.

"I struggle with making choices for individuals when there is an opportunity to do it for themselves," Keating said.

Customers would still have the ability to opt out of the program at anytime, officials said.

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Tim F May 09, 2012 at 01:17 PM
The City estimates homeowners will see an average savings of $300 per year. I'd like to see the math on that lofty estimate. Where are you going to buy electricity for $0.025 per KWH?
Mike Ziak May 09, 2012 at 02:11 PM
All I want to know is how I can opt-out and how quickly can I do so? Based on who's running this, I want no part of it. A savings of $300 per year? Yeah, right? IM guessing the same person who estimated the $1.1 million in revenue from the new sales tax is the same one who figured this lofty number.
chuck toland May 09, 2012 at 04:05 PM
Mike, the $1.1 million was calculated from the State based on qualified sales in Oak Forest businesses in 2011. They provided a chart based on each % we could consider. These are actual figures and not something someone came up with. You can opt out right now if you want by contacting another provider and negotiating your own savings, or you can wait until the provider starts supplying the power and then opt out. There is nothing to opt out from right now. ComEd is still your energy provider. Tim, 2.5 cents to 2.73 cents per kilowatt hour savings is approximately a 35% savings, and that is where the number came from. I would be happy to get you more information if you like. No one is forcing you to save money on your eclectic bill. I am happy we are able to provide the chance; you make your own mind up.
chuck toland May 09, 2012 at 04:10 PM
I would also, like to point out as I did earlier on this subject, there are additional savings that some residents are reaping due to time of day usage and using all electric heat and cooking instead of gas. This approach would save individual homes even more as any negotiated rate the city can come up with would never come close to that pricing. Also, any rate discounts residents have now will be honored by a new supplier if one so chooses to stay with the new supplier.
Tim F May 09, 2012 at 05:55 PM
Since only the electric supply charges, not the entire bill, are in question for the savings, I calculate my savings at $140 per year if you can find a RELIABLE supplier for 2.75 cents cheaper per KWH. Now with all of the towns hunting for electric suppliers I don't think a lot of these "mom and pop" sized suppliers will be able to meet the peak demand for summer. Nobody will lose their electricity, but they might be at the mercy of some electric supplier who will charge for power at the then "spot price". Large and dependable suppliers - WEC, Vectren, Dominion, AEP, etc. are not going to sell power for 2.5 to 2.73 cents cheaper than Exelon's current 6.968 cents current price. The old saying if it sounds to good to be true might apply if you deal with someone who can't meet the increased demand. Be careful you might just get what you pay for.
Laura Clemons May 09, 2012 at 07:01 PM
Orland Park just finalized their contract and signed on with Nordic Energy at a 4.81 cents per KWH for two years - a 31% savings from current Exelon rates. Our city admiistrator estimates that we should be able to save the same or maybe a bit more when we begin the bidding process on May 10th. Based on my average monthly usage, if we saved a minimum of 31% per year, I would realize a $287 savings annually.
Mike Ziak May 09, 2012 at 07:54 PM
The fact that "the State" calculated that amount just fills me with confidence that its correct. Did you ever notice that when "the State" calculates projected revenue based on a consumption tax, that the actual revenue is always far shorter? Do you know why? Because they base their projections on old data, they never account for the people that will stop buying things where the tax is higher. I understand who my electric supplier is currently and how the whole distribution thingy works out. So, if I switch to someone else now IM automatically out of the City program? Funny, thats not how I read it. Keep thinking we're like Orland Park because our two towns are so much alike, right?
Michael M. May 09, 2012 at 09:40 PM
The city has no business getting involved in what people pay for their private electrical supply or anything else. How many times do we have to go through the cities, states, and the feds trying to "help" the citizenry, only to get screwed in the end because the system gets corrupted, or the Govt. entity decides it is time to initiate a fee or tax. No thanks, stay out of my business, you can't even get the city business straight.
Michael M. May 09, 2012 at 09:45 PM
They have already added a $10 fee and the program hasn't even started yet. It was not discussed in anything I heard or read previously. Need I say more? I am sure city council member will defend it, but you guys defend every mistake. I applaud Mr. Simon and Keating for the "NO" vote. They understand the meaning of "choice". If the city wanted us to have a real choice, they would have made the referendum and "opt in" Instead of an "opt out".
Michael M. May 09, 2012 at 11:51 PM
Chuck, why do I have to pick another provider in order to opt out? I shouldn't have to do that, it should have been an "opt in" program. But, I understand you had to do the "opt out" so that you could get as many people in the program as possible.
Michael M. May 09, 2012 at 11:53 PM
Electric rates are higher than gas rates. Why would I switch to electric?
Mary Attreau May 10, 2012 at 04:50 AM
I'm sure everyone in Oak Forest would like to be able to save $300 per yr on their electric charges, I'm surely for that, but I believe that everyone should have been sent some information by mail prior to the vote on this matter. I know there were two or three meetings at City Hall, but not everyone could attend, so they believe that something fishy is going on. Please send out some info on the aggregation, for those of us who don't understand the whole concept. Thanks
Posititve Thinker May 10, 2012 at 02:49 PM
Mary- We all received information regarding this prior to the vote, if you read your mail. I am all for the village trying to negotiate a better rate, all the negative thinking people just bring a community down. You really need to start thinking positively, your life and your community will be better for it.
chuck toland May 10, 2012 at 03:23 PM
ComEd is currently at 7.73 cents per kilowatt hour with a rumor of going up to $.08. The city did not add a $10 fee on to the plan already. You can try and spin that one any way you want Mike, but the fact is by deciding to go with a clean energy privider for the betterment of our residents, the actual savings will be reduced. The $10 figure comes from the calculated $300 average savings. The savings will be different for each customer depending on usage. If you save less than $300/year it is because you are being conscious of your electrical use. There are customers who will save more than $300/year. That is how averages work. The city is not telling anyone who they should purchase their electricty from or how much they should choose to pay. The average resident doesn't have the time or knowhow to negotiate these charges themselves (not an insult, just a fact). If they did, everyone would be buying electricty from another supplier already. I know people who had done this years ago, and have been saving $$$ for years. The city particpated in thie aggregation just because there is purchasing power in numbers. It is a simple concept. If the individual home can do better than the city can negotiate, then obviously there is no choice in the matter. The idea of these companies not being able to supply during peak hours in the summer is wrong. ComEd does not produce electricity, and they purchase from the same companies we are negotiating with.
chuck toland May 10, 2012 at 03:30 PM
Mike, the State did not calculate anything. That was a bad choice of words on my part. All they did is make a chart based on actual sales (from 2011) that would be directly effected by the sales tax and provided a corresponding figure that would represent each percentage we could have passed. Of course they could not make calculations on trying to make a prediction on who will go elsewhere to make their purchases. You are an engineer. If you would like to come up with other figures, I would be willing to listen.
Ruth Ensing May 10, 2012 at 04:08 PM
I already left ComEd and I will be opting out from anything the city negotiates. I have the "know how" to determine who I want to be my phone company, the program with NICOR and where I can get the least expensive electricity without having to commit to lengthy contracts like the city will have to do. My real question, however, is since we pay the 6% municipal utility tax on USAGE, the city is still going to reap the benefit of that tax no matter what we pay for the electric service, correct? If memory serves, the 6% tax is the maximum so at least we don't have to worry about another raise in this particular tax.
Michael M. May 10, 2012 at 08:51 PM
There really is no way to prove that everyone was informed, but I am sure that the city followed the law for public notice. Positive thinking will not pay off the cities deficit or balance the cities budget. As I stated already, the $10 fee for renewable energy is new and was not mentioned at the public hearing, which I attended and maybe 3 other residents attended. The fee is what makes me weary, they will just continue to tack on taxes or fees. The Govt. has no business in the citizens private business. If they want us to save money, then just make it easier and less expensive to do business in the city.
Michael M. May 10, 2012 at 09:08 PM
Mr. Toland's quote " The average resident doesn't have the time or know how to negotiate these charges themselves (not an insult, just a fact)." You are pretty arrogant to state that the citizens do not have the knowledge to make this decision on their own. Who do you think you are? Are you telling me that you, and the rest of the city council, and the mayor are much smarter than us and that we can not make informed choices without your help?! I hope the people you represent will remember your statement when you come up for re-election. That was an arrogant and rude comment to make about the people you WORK FOR!! You can spin the $10 fee any way that you want. But, I do not recall that $10 being mentioned at the meeting or in any of the literature that was handed out.
chuck toland May 10, 2012 at 09:35 PM
Michael, my comment was not out of arrogance. If you feel I am arrogant, you do not know me. The city spent many many hours on this research on your behalf. There is such a small % of people who have done this on their own, and some that have entered into bad contracts because of it. I consider myself an average resident, and I don't feel I have the time or knowledge to investigate this. That is the only reason I still have ComEd as my supplier. If I had the time or knowledge, I would have switched years ago. Of course the average person can make their own decisions and make a sound choice. By saying that, I don't mean the average person is not smart. Many people do not deal with this on a day to day basis to make this decision. Some do, and I applaud those who do. I compare this to someone who would hire someone to do work on their house like a handy man or construction company. We don't hire these people to do the work because we prefer to pay someone else our hard earned money, we do this because we do not have the time or knowledge to do so. We don't buy groceries at the store because we have unlimited monies, we buy them because we don't have the time or knowledge to do so. It is a common phrase that is used to justify the fact that we cannot do everything ourselves. If I offended you or anyone, I am sorry. That was not my intention. I was purely adding some insight as to our thought process.
Michael M. May 10, 2012 at 11:12 PM
I see Chuck, you sounded arrogant because I don't know you. You sounded arrogant to make that statement, period. That is the problem with politicians, they believe they know better than the average citizen. I can tell you this, my wife and I are not running a deficit. People can take care of themselves, we do not need a nanny state to take care of us. Maybe some people want to stay with their current supplier and service company because of other reasons besides cost. Maybe some like the community outreach of a particular company and want to support it, or like the charities that the supplier supports and so on. If the city wanted to be sure that the citizenry knew that they could switch suppliers, all the city had to do was to send out a mailer, or an email, or public notice, or even ask the suppliers to send notices. By the way, I have been getting notices for at least a few years about switching from suppliers, I would guess the majority of the citizens have also received them.
Mike Ziak May 11, 2012 at 12:05 AM
Sorry Chuck, I don't dabble into trying to figure out projected revenue from government entities because its always skewed with different money pots here and there. But I am smart enough to know that projecting revenue from a chart the State, especially this state, produced has disaster all over it. I'm also smart enough to make my own choice in selecting an electric provider and part of that choice is knowing how to opt-out of the City program. Please make that information available ASAP.
Mike Ziak May 11, 2012 at 12:17 AM
This "talk" of getting power from "green" sources is nothing but a feel good spin for those who passed it. Sure you can say that your buying power from a green supplier, and the supplier can bring out all kinds of eye popping charts and spreadsheets, but in all reality the power that you are using in your home is still coming over the same lines as the power from a non-green plant. How do you even know if the power generated at that green plant actually reaches this area? You dont. If there is a fee passed for this, you're simply paying the extra money for the "thought" that you are using green power and if that makes you feel good at night, well so be it.
Allen De Normandie May 14, 2012 at 04:59 PM
I'm glad to see the city take a proactive stance on GREEN ENERGY infusion into the grid system. I realize that NIMC won"t represent Viridian Energy but at least we will reducing our carbon footprint and dependence on BROWN energy from Excelon. Hopefully the opt out provisions from the new supplier will allow for maximum flexibility for the residents! Most new contracts are somewhere between .045 to .050 cents KWH. With Excelon increasing rates over .08 cents KWH my estimated savings is approx $316 per year.


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