CHICAGO | Aggregation can save you money on your electric bills. But you have to vote for it on Election Day.
A recent poll shows Chicago voters know little or nothing about the electricity aggregation measure that will be on the Nov. 6 ballot.
The city of Chicago and a local consumer advocacy group are making a late push to inform voters about the choice.
At the first of four community meetings, city representatives fielded questions Tuesday night about the community aggregation referendum.
Then Wednesday morning, the Citizens Utility Board, a nonprofit utility watchdog group, announced the launch of a new "Chicago Power Center" website to educate residents about the potential impacts of the impending vote.
A poll of 600 registered Chicago voters conducted by the Environmental Law and Policy Center, an environmental legal advocacy organization, showed that 25 percent of those surveyed knew little about aggregation and 44 percent knew nothing about the issue.
If approved, the aggregation program will offer short-term savings for the city's approximately 1 million customers on their electricity bills.
The measure will give the city the authority to solicit bids and choose suppliers on behalf of residents.
"The theory behind municipal aggregation is that there is power in numbers," said CUB Executive Director David Kolata at Wednesday's news conference. "Much like a big box store can negotiate for lower prices than the corner store, the theory goes that by aggregating all of the consumers in a municipality together, you'll be able to get a better price."
According to CUB, residents in the nearly 200 Illinois communities that already have aggregated are seeing savings of nearly 50 percent, paying on average 4.83 cents per kilowatt-hour, compared with ComEd's standard rate of 8.32 cents per kWh.
Kolata said the group estimates that Chicago customers could see total savings of around $100 million in the first five months of 2013, which equates to about $100 in savings for the average homeowner.
However, the long-term benefits for consumers' pocketbooks are uncertain.
According to the CUB, the large number of communities that have aggregated in recent years have largely done so in response to ComEd's higher-than-market energy prices, resulting from long-term contracts that ComEd signed in 2007.
"These long-term deals were reasonable deals at the time, but since that time, we've had two things happen," Kolata said. "One is that we've had an economic recession that has reduced demand (for electrical power). Two, we've had an increase in natural gas production."
This simultaneous increase in energy supply and decrease in demand has driven down market prices for electricity to levels far below the rates that ComEd locked in, allowing aggregators to broker significant savings.
But ComEd's contracts expire in June, at which point the long-term impacts of aggregation become less clear.
Kolata said that once ComEd's contracts expire, the utility's price for electricity is expected to drop dramatically toward whatever the market price is at the time.
"There's a great opportunity now, but just because municipalities are saving big money at present, doesn't mean that will always continue," Kolata said.
To combat this potential reduction in savings, Kolata advised that communities invest in improving energy efficiency to insulate customers from future market fluctuations and to reduce waste.
Tuesday night, Mark Pruitt, the former director of the Illinois Power Agency who was hired by the city to consult on the process of aggregation, presented information on behalf of the city. He fielded questions from a small crowd at the Arturo Velazquez Institute on the near Southwest Side.
One member of the audience asked how the city would handle the possibility of having multiple suppliers for the aggregated customers.
"The way that we present it in the plan of governance is that in the event of a multiple supplier arrangement, we would randomly assign customers to the suppliers so that they would be equally distributed," Pruitt said.
"There is also a desire to keep the same price across the city. We really think that that's important," Pruitt added.
Pruitt stressed that aggregation will give the city the ability to negotiate with suppliers but it won't mean that consumers are dumping ComEd as their provider because ComEd owns all of the power lines and infrastructure that will be used to deliver electricity. And aggregators ultimately will be buying power from ComEd.
Pruitt advised that Chicagoans who wish to opt out of the aggregation program will be allowed to do so at any time, without penalty.
If the measure is approved, the city will notify customers by mail of the program price and contract terms in November. At this point, customers who choose to opt out can do so via return mail, a toll-free customer service number, or through a website.
"The city's approach to opting out is to allow that to happen at any time, at no price, at no penalty," Pruitt said. "The idea is that this is about choice. This is just another choice in a series of them. If it's a good deal, you'll do it. If it's not a good deal, you'll pass on it."