Philip Carr, Business Development Director of Good Energy, explains the Municipal Electricity Choice Program and that by voting YES for this legislation, electricity costs for all homeowners will be significantly reduced.
What is Municipal Opt-Out Aggregation?
Municipal Electricity Opt-Out Aggregation is a program that allows Municipalities such as villages, cities, counties, and townships the option to create a large buying group of residential and small commercial retail electricity accounts in order to seek bids for cheaper rates. Right now in Ameren and ComEd, customers obtain power at a fixed rate, regulated and set annually by the Illinois Commerce Commission. Grouping residential and small commercial accounts together creates economies of scale, enabling participating Municipalities the ability to achieve greater savings than could normally have been achieved by the individual customer.
What are the Benefits of Municipal Opt-Out Aggregation?
The key benefit to Municipal Opt-Out Aggregation is the opportunity for residents and small businesses to save money on their electric bills. Individual accounts can potentially save between 10% to 15% off of their entire bill, up to 32% or more off of the supply portion of their bill, based on current market conditions. Everyone wants to save money, but spending some of those savings will also set conditions for additional positive economic benefits within your community!
How does Municipal Opt-Out Aggregation work?
First, the Municipality must place a referendum on the November 6th Primary Election ballot, asking voters to give their municipal government authority to create an aggregation program. Once the referendum is approved, the Municipality will create an aggregation plan that includes the objectives, procedures and process for the program. The Municipality, through its expert consultants, will then seek bids from Alternative Retail Energy Suppliers (ARES) to obtain competitive electricity rates for participants. A resident or small business will be able to Opt-Out of the Municipality’s program without penalty if they so choose.
How does Municipal Opt-Out Aggregation impact my current situation and electricity bill?
The impact of Municipal Opt-Out Aggregation is primarily savings. Participants will see NO change in their utility bill other than a price reduction on energy supply. They will continue to receive a single bill, make one payment, and continue to receive all other services through Ameren or ComEd. However, if customers are already purchasing their power from a company other than Ameren or ComEd, they are ineligible to take advantage of the Municipal Opt-Out Aggregation rate. A resident or small business can join the Municipal Opt-Out Aggregation program (assuming they are not in an existing contract with an ARES), still be billed by Ameren or ComEd, and receive a price reduction, but early termination of a contract with another electricity supplier may result in penalty fees. Check the terms and conditions of your existing ARES contract.
When will the Municipal Opt-Out Aggregation go into effect?
Before the Municipality is able to implement the program, voters must approve a referendum, the next being held on April 9, 2013, to allow for municipal electricity aggregation. If the referendum passes, the program will begin in the summer of 2013, just about when air conditioning demand will pick up.
Do I have to participate in the Municipal Opt-Out Aggregation program if I do not want to?
No. Residents and small businesses can Opt-Out without penalty. Opt-Out notices will be provided via mail prior to the program commencing.
When will I start seeing a reduction in my electricity bill?
The earliest participants would receive bills with new rates is May/June, 2013. But remember, the new rate will reflect service received for the previous month, i.e., if service begins in June, your utility bill will not reflect the new rate until May for the previous month's service.
What part of my electricity bill will this program affect?
Your electricity bill has three cost components – transmission, distribution, and supply. Municipal Opt-Out Aggregation changes only the supply component of your bill. In the final analysis, approximately 50% to 75% of the electricity bill will be impacted. The other components, transmission and distribution, will not be affected.
Who shall I call if there is an outage or issues with my electricity bill?
All service and billing questions will continue to be directed to:
Ameren (800)755-5000 or ComEd (800)334-7661.
I am currently receiving offers from ARES promising lower electricity rates. What should I do?
The earliest the Opt-Out Aggregation program is likely to begin for those not already participating is May/June 2013. Consumers who decide to switch to an ARES before the municipal program is available should consider several aspects of the existing retail supplier’s offer before entering into agreement. These may include, but are not limited to the following:
1 - Price/kWh
2 - Contract length: many ARES require a minimum 1-year contract, while only offering a fixed price for the first six months. It is important to determine what happens to the offer rate at the end of the first six months. Some ARES do not define this in their offers. Depending on the contract term, a customer may be prevented from getting the aggregation rate until the contract ends.
3 - Early termination fees.
4 - Pricing terms which take effect at the end of the agreed upon fixed rate (as mentioned above in #2 and/or at the end of the term), etc.
5 - One bill or two? Under the Municipal Opt-Out Aggregation program, participants will still receive only one monthly bill and make only one payment to their respective utility. Some ARES do not have this provision, meaning customers may receive their regular bill from Ameren or ComEd and a separate bill from the supplier.
How can I get more information about the Municipality's Aggregation program?
Various public meetings and information sessions will take place through, and following, the election on April 9th, 2013. Please check for announcements from your municipality and your local news outlets. The municipal website will feature all materials related to the referendum and the aggregation program as they become available. You may also call and speak to a Committee representative, or go to the Illinois Competitive Energy Association website for additional information.
Who is Good Energy?
Good Energy, LP has been running large and small Municipal Aggregation programs in various states across the country since 2008. Good Energy is headquartered in New York City, with its Municipal Aggregation operations being based in Peoria, IL. On March 20th and November 6th, 2012 Good Energy helped 55 and 56 Illinois Municipalities and Counties respectively pass referendums allowing all of their residents, more than 427,400 households, to purchase electricity on a massive scale. This resulted in residents electric bills being reduced by nearly a third. Good Energy helped create the Committee for Municipal Electricity Choice to spread the word about the benefits and incredible savings residents have seen by approving Municipal Opt-Out Aggregation referendums.