CALUMET CITY | Residents will have the chance in coming weeks to decide if they want to be included in the city’s plan to reduce electricity rates for them through the process of aggregation.
Letters were sent out Friday, giving residents about two weeks to decide about their inclusion in electricity aggregation.
A majority of local residents voted in favor of the idea in November. Since then, city officials have negotiated with various companies to see which one could supply electricity to Calumet City customers at the lowest possible rate.
That negotiation process resulted in three companies making proposals, and the City Council on Tuesday voted unanimously to go with an offer from Collinsville-based Homefield Energy, a division of Ameren Inc. The contract is for 15 months, according to 3rd Ward Alderman Thaddeus Jones.
The rate of 4.9 cents per kilowatt hour that Homefield offered will result in Calumet City users seeing a 30 percent reduction on the part of their bills that relates to electricity use, said Tom Mannix, city spokesman. Now, residents pay an average of 8.4 cents per kilowatt hour, Mannix said.
Two other companies — Constellation and Integrys — also submitted bids, but Jones said the fact that Homefield is Illinois-based influenced the aldermen to pick the company.
Under the process, residents receive the letter informing them of their ability to opt out of the deal negotiated with Homefield by city officials.
This part of the process is meant to allow residents who think they can come up with a better deal for themselves to do so.
But Jones said city officials expect the bulk of local residents either to opt-in to the deal, or to do nothing at all. In such cases, people who do not respond to the letter are automatically included in the deal.
With responses due by late this month, officials hope the new rates can start taking effect March 1, which would allow Calumet City customers to see lower utility bills beginning this spring.
Jones said what little concern he has heard from local residents about aggregation is mostly from people who do not completely understand the concept. With aggregation, city officials negotiate a mass rate for all residents that reduces the amount individuals have to pay.
“I don’t think we’re going to get a lot of letters from people who don’t want to be included,” Jones said. “This is not something bad; it is good.”
Other local communities whose voters approved electricity aggregation in the November elections also are working their way through the process.
Dolton officials approved an agreement with Integrys Energy Services Inc., that will provide residents with a 35.7 percent drop in the rates, compared to what local utility customers were paying to receive electricity from Commonwealth Edison, according to the village newsletter. The opt-out process for Dolton residents took place during January.
Dolton officials also used their village newsletter to express pleasure with their own rate drop, which they compared to Chicago, which also signed a deal with Integrys but was only able to negotiate an 11 percent rate cut for city residents, including those from such neighborhoods as South Chicago, the East Side and Hegewisch.
Both municipalities say their residents will begin to see declines in utility bills in March.