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Will County Electrical Aggregation Measure: What to Know

In addition to the residents of 23 Will County towns, people who live in unincorporated county will also see a referendum on March 20 backers hope could cut power bills.

Will County is seeking a ballot measure it hopes could cut electricity bills for the 105,000 residents of unincorporated county.

Residents could see lower electrical bills as soon as July 1, if voters approve an electrical aggregation referendum on March 20 and the county is able to find a lower rate for residents, county board spokesman Nate Brown said.

The county referendum will only affect residents and small business owners in unincorporated areas. Combined with the 23 Will County towns also seeking referenda, this could affect as many as 675,000 residents, Brown said.

But first, voters need to know what they're voting on.

"As board members talk to constituents, they're reminding them to get more information before they go to the polls," Brown said.

What's Electrical Aggregation?

ComEd is the company that provides the infrastructure that gets the electricity from power plants to your house. It picks the power companies that generate the electricity.

A measure passed last year by the state Legislature will let municipalities and counties negotiate for better rates from the power companies on behalf of their residents and small businesses. They just need permission from the voters.

If the referendum passes, ComEd would still get the juice to your house and the bill will still come from ComEd.

Residents and business owners can already and still will be able to find their own cheaper rates. The Citizens Utility Board and the Illinois Commerce Commission offer resources for residents to do this online.

"It took me probably 20 minutes," said Mokena resident Ray Baranak, .

The county (or village or city, depending on where a resident lives) would then look around for a better price for the electrical part of the bill. It will take the lowest, so if ComEd still has the best rate, ComEd will still be the provider.

Will County Timeline

Brown said that if unincorporated-area voters approve the referendum, the county will schedule the two mandated public hearings for late March or April.

Next comes the official "plan of operation and governance," basically the county laying out how it plans to get service to all its residents. Then starts the bidding process.

"The one estimate I have is that they would run the bid process in early May," Brown said.

Voters who want to weigh in on the referendum but not the Republican or Democratic primary races can ask for a non-partisan ballot. That will still have the referendum.

But before the election, voters should look into aggregation and see if it's something they want to vote for.

"I have been receiving a lot of questions about the electric aggregation referendum on this month's ballot, and I want to stress the importance of taking the time to thoroughly educate one’s self on the issue," county board Chairman Jim Moustis said in a press release on Thursday.

Additional information can be found at www.willelectricaggregation.org or on the video attached to this article.

Correction: This story was corrected at 11:04 a.m. Friday to clarify that ComEd does not operate the power plants that generate the electricity. Patch regrets the error.

Tim Ozinga March 02, 2012 at 02:39 PM
I still haven’t decided how I am going to vote on this referendum; however I am leaning towards voting no. I would like to see the following questions answered clearly: •What is the benefit and why is it necessary to give the authority to the village for electrical aggregation when everyone already has their individual choice between a multiple different energy suppliers? The energy market has been flooded with suppliers since the energy deregulation bill passed and anyone can compare & switch on their own in minutes through organizations like the Citizens Utility Board or Power2Switch. •What is the difference in savings that the village can get through aggregation compared to the savings that individuals can get on their own? •If the referendum is passed, what is the potential cost savings compare to the costs associated with campaigning this cause, developing a governance plan, developing/producing documents, seeking proposals, holding public forums, etc? •What is the cost of the village and village board’s time? Could their time be better utilized? •Will there be any taxes imposed based on the costs incurred with electrical aggregation? •If the referendum is passed and a new supplier is chosen, will the village be locked into a long term fixed contract? If so, how long? •With energy deregulation still being relatively new, has the village done any forecasting or trend analysis on future electric rates?
James Boss March 02, 2012 at 03:29 PM
This site does not present the entire picture, and for that reason I am very skeptical. My vote is NO unless I can answer the following questions: 1)what are the administrative costs of this program? 2)who pays those administrative costs? 3)would everyone, even those opting out of the program, end up paying those costs either directly or indirectly? If all costs and potential benefits are fully disclosed I will decide how to vote based on the data ... if they are not disclosed I will vote NO. I am very disappointed that so many conservative leaders are supporting this effort without providing the complete picture to their constituents.
James Boss March 02, 2012 at 03:47 PM
UPDATE: I received a very prompt reply with specifics on the program, pasted below: There are no up front costs to the communities with this program. The Will County Governmental League has contract with DaCott Energy services to provide assistance as a consultant and broker on behalf of the communities in this program. They way the contract is structured they will only get paid if they secure a lower rate. If no bids are accepted they are out the money they have spent to this point and will not be paid anything. DaCott's fee, assuming they secure a lower rate would be rolled into the new rate. It is $.00015 per kw/h. This works out to $1.50 per account per year, and their fee is capped at $300,000 per year. This rate is 66% lower than the other brokers whose rates are not capped. This is the only fee that will be associated with this program, and it is only in play if a lower rate is secured. Communities that have already done aggregation are seeing savings of $150-$225 per year. It is a pretty fair trade off to pay $1.50 to save $150-$225. My rough analysis: The numbers imply reasonable assumptions (~$0.10 per kwh, ~1000kwh per month, savings of ~$0.01 per kwh)
Tim Ozinga March 02, 2012 at 04:21 PM
It is understandable that there are savings to be had; the question is why do we have to give the Village of Mokena authority to make a decision who is to be the electric supplier? The argument that the village’s consultant, DaCottt Energy, doesn’t get paid unless savings are realized does not address the full question of how much of the villages resources (time & money) are being spent to push this referendum through. The fact that DaCott Energy offers their consultation services at a much lower rate than other consultants is great- a good consultant choice; but how big of a consultation fee would The Village of Mokena (us the taxpayers) be paying if people were left up to their own individual choice? The answer to that is $0.00, compared to the potential $300,000 cap. At current rates residents can either switch energy providers at a variable rate or lock in with an alternate energy provider at a fixed rate for up to two years as low as 5.75cents per kWh. Other surrounding towns that have gone the way of electric aggregations are locked in at rates around 5.99cents per kWh according to last year’s numbers. These alternate energy suppliers also offer no switchover fees and no early termination fees. Will the town have the same freedom in their contract?
Joe Vince (Editor) March 02, 2012 at 04:46 PM
@James Boss and @Tim Ozinga: Let me answer some of your questions. Although I cover Frankfort, some of the same issues apply. This story can give you more background, too: http://patch.com/A-mnhf * Aggregation Benefits: Whether as a village or as part of the Will County Governmental League, the idea is that these govt. bodies can negotiate a better price because of their strength in numbers. * Difference in Savings: Electricity rates constantly fluctuate, so that savings depends on what it's going for at the time the rate is locked in. Because of that, there could be cases an individual could get a better rate than the village or the county, but that individual would need to be savvy enough to know how to watch the market. * Cost to the village: I can't speak for Mokena, but Frankfort is not campaigning for or against aggregation. Mayor Jim Holland has said the village is neutral on the matter. The only thing it's doing is providing as much information for residents as possible, something New Lenox officials strongly suggested when they put aggregation on the ballot last year. In Frankfort, public forums have been tied to other issues, and documents have been provided by the county and other organizations. * Village's Time and Resources: This depends on whether Mokena, like Frankfort, decides to pursue aggregation on its own or with the county. In either case, I'd imagine it would be fairly minimal. (Cont.) Joe Vince Local Editor, Frankfort
Joe Vince (Editor) March 02, 2012 at 04:57 PM
(Answers continued) * Taxes: Frankfort officials have said there would be no taxes or extra fees tied to aggregation, and the village is not receiving any extra money from it. This is just to provide the opportunity for a better electricity rate. * Contract Terms: These vary. A village could go year to year, but it's most likely to lock into a three-year contract, which is the safest span of time. Anything more than that and you're running the risk of being stuck with terrible rates. I want to emphasize that even if the referendum passes, it doesn't mean your service or rates have to change. You can always opt out of the program, keeping your service the way it is or pursuing your own rates. As far as costs from the program being deferred to residents through taxes and fees, that won't happen from everything I've looked at covering aggregation in Frankfort. So even if you don't participate in the program, you won't be expected to foot the bill for additional costs. Has this answered the questions you had on this? Joe Vince Local Editor, Frankfort
Joe Vince (Editor) March 02, 2012 at 05:05 PM
And one last thing concerning worries over big government getting involved with residents' individual choices: Municipalities negotiate rates for services on behalf of their residents all the time. This isn't a new concept. Villages already do this with such things as garbage pick up and other services. I don't say this as an advocate for electricity aggregation (I don't have a horse in the race either way). I just think it needs to be put into the proper context. Now whether you think governments shouldn't even be negotiating for garbage pick up and that that should be left up to the individual resident is another matter. Hope this has helped. Joe Vince Local Editor, Frankfort
Tim Ozinga March 02, 2012 at 06:28 PM
I understand that municipalities negotiate rates for various services and that the Illinois Power Agency (IPA) already negotiates power rates on behalf of Illinois residents. From a short term perspective electric aggregation is a win-win situation, and if passed, perhaps a great stump speech for any candidate up for reelection in the next year or two. However in the long term there are a lot of unknowns. The 20+ alternate energy companies that have flooded the market since deregulation are offering discounted rates to procure customers- they are simply taking advantage of the fact that they can undercut the pricing agreements that ComEd is locked into while they can. In a year or two when the long term contracts the IPA signed with companies like ComEd & Ameren expire, the playing field and prices are going to level out and about half these alternate energy companies with either merge or dissolve. The alternative energy companies are spending hundreds of thousands of dollars, if not millions, in advertising in an effort to gain customers. That is what businesses do and it is up to the people to choose whether or not they would like to purchase that business’ goods or services. What are we going to see on the next referendum? Negotiating better cable rates?
Tim Ozinga March 02, 2012 at 06:29 PM
I will be voting NO for the referendum because I do not need the federal, state or local governments making anymore decisions on my behalf – whether it is for the “common good” or not. All this effort put forth on behalf of the referendum is being done (we are told) to “inform the residents”. Instead of informing residents that the village is making decisions on their behalf, for their own good, they should be investing their resources in empowering residents to reason and make their own decisions. Hopefully residents will get informed, do their research, and make a decision; not just pull the lever because they are “saving money”.
It's me... March 02, 2012 at 07:11 PM
If you go to the Citizens Utility Board website ther is info there as well. One thing that stood out, is that there really isn't proof of significant savings.
Joe Vince (Editor) March 02, 2012 at 07:39 PM
@Tim Ozinga: You're right about rates leveling out. I wouldn't be surprised that within the next five years or so some of the municipalities that go down the aggregation path will wind up back with ComEd because it will have the best rate. Village already negotiates your cable rates after a fashion by setting up franchise agreements with a single company. Sure, you can choose satellite TV or TV through AT&T, but you can't choose Time-Warner Cable if you want it. Joe Vince Local Editor, Frankfort
Joe Vince (Editor) March 02, 2012 at 07:51 PM
@Tim Ozinga: Would it be accurate to say that you're voting no on principle? Because even if the referendum passes, you can opt out of the village (or the county) choosing your electricity company. You're not locked into it. Also, is aggregation really about the government being paternal--making decisions for the residents' own good--or using the advantages it has to benefit citizens? Of course, I can certainly understand if you don't trust your local government to be savvy enough to negotiate better rates, but that doesn't sound like where you're coming from. I ask all this because I'm genuinely curious. And I hope more people heed your advice about becoming more informed on this issue. Too many people blow off non-presidential elections, even when there are important items on the ballot. It's great to see people like yourself not only being informed but engaging other people about it. Joe Vince Local Editor, Frankfort
Joe Vince (Editor) March 02, 2012 at 07:55 PM
@It's me...: That's a bit of the gamble because of how wildly electricity rates fluctuate. In talking with people who deal with following electricity rates as part of their job, it's hard to pin down hard numbers this far out from when the aggregation program would be implemented. Everyone I've spoken to agrees residents would get some savings, but how much exactly is anyone's guess. Joe Vince Local Editor, Frankfort
Tim Ozinga March 02, 2012 at 08:29 PM
I am aware that the village already negotiates our cable rates through franchising agreements, I should have been clearer. I was simply trying to make a point that you have options on where you get you television services from and you have to weigh the options and make a decision based on what is in the best interest for you, your family, and your budget.
fred March 02, 2012 at 08:43 PM
Two questions I have: 1.How will this affect the coming Smart Grid? I currently particpate in ComED's real time pricing program and see some good savings from that. 2.Is participation in this aggregate program mandatory?
Tim Ozinga March 02, 2012 at 08:48 PM
There is part of me that will vote no based on my principles & beliefs. I understand every resident has the right to opt-out if the referendum passes. My question is why do we need this referendum when every individual resident already has the opportunity to opt-in to any program of their choosing? There is no proof that electric aggregation will provide a more discounted rate than any resident can acquire on their own. So what’s the point of the referendum? Are we to assume that the residents are not capable of making decisions on their own behalf? The other part of me will vote no because I feel that spending any tax-payer dollars on this referendum is a waste of our money. The village will say the amount is minimal, but that is all relative. The question is what is a minimal cost to the village? How much is being spent on holding town hall meetings, creating media related to electric aggregation: commercials, web, pamphlets, presentations, etc. If the referendum is passed, how much will be spent on developing a governance plan, developing/producing documents necessary, seeking proposals, and holding additional public forums? These costs don’t even take into consideration that if the village moves forward they potentially could owe a $300,000 fee to the energy consultants if a lower rate is contracted (which is a given as long as the referendum passes before current ComEd contracts expire).
Tim Ozinga March 02, 2012 at 08:51 PM
As far as aggregation being paternal, you could argue either way, but on this specific example there simply is no clear advantage the village has that the residents do not already have themselves. So in this instance I say yes, there is either a paternal element or our government is using our tax dollars to put a feather in their cap under the guise of trying to do us a favor.
Chip Krusemark March 03, 2012 at 10:27 PM
Frankfort had a very nice meeting to inform us all about this, the video of this presentation is here: http://villageoffrankfort.pegcentral.com/player.php?video=f0ba07df9391b604b25cfb14b0c6b1eb By voting Yes, you are give the Villages the opportunity to bid out the commodity, you can personally make up your own mind to join in at a known rate (if a bid is accepted by the group), opt-out and keep your existing plan, or choose another supplier, very simple, and you're not personally committing to anything!! For a number of people who might get confused by all this, by default they'll be getting a lower price, not a bad deal for the default situation. By voting No, you are taking away an opportunity (from all of us) to see if we can reduce our rate! I would urge you to give us the option of looking into this by voting yes. @TIm, you state " why do we need this referendum when every individual resident already has the opportunity to opt-in to any program of their choosing?" Because larger discounts "may" be available to a much larger group than what would be available to an individual, just like any other quantity discount.
Chip Krusemark March 03, 2012 at 10:28 PM
part two From the Illinois Commerce Commission website, about 20 other communities have already done this with rates ranging from 6.23 cents to 5.43, the average being around 5.75 - 5.80 cents, which at 5.80 cents we are looking at a 25% discount to our current rate of 7.733 cents, though we won't know for sure what rate we may get until we bid it. While I'm not a fan of big government, I doubt that we as individuals could get the same rate that this group of communities can get, plain and simple.

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