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Big vote: 3 things you should know about electric aggregation

On Tuesday residents in some 80 communities or counties will vote on whether they want local leaders to negotiate their power prices with ComEd or Ameren competitors. (See this great chart the Illinois Commerce Commission (ICC) put together.)

The referendum will look something like this:

Shall the (Name of county/municipality) have the authority to arrange for the supply of electricity for its residential and small commercial retail customers who have not opted out of such program?

It’s called “municipal aggregation,” and since 2010 more than 650 communities/counties across Illinois have already passed referenda on the matter. If a community passes a referendum, which is required by state law, local leaders are allowed to automatically switch their constituents to a new supplier, unless a consumer opts out.

As CUB wrote in a recent news release, aggregation takes a “Costco” approach to buying electricity. Just as the wholesale warehouse chain can secure lower prices, for items such as TVs, by buying in bulk, the theory is that community leaders could negotiate lower electricity prices by using the collective buying power of their residents and small businesses (businesses using no more than 15,000 kilowatt-hours a year).

Three things you should know:

Participation is optional. Even if you vote for aggregation and your community passes the referendum, you will not be required to sign up with an alternative electricity supplier. You will have two opportunities to opt out of the program.

Aggregation does not mean you will avoid utility rate hikes. It just means a different company is supplying your electricity. Your utility—Ameren or ComEd—will still charge you for delivering the power to your home. Those “delivery” rates are what go up when the Illinois Commerce Commission (ICC) grants utility increases.

Aggregation has meant consumers savings…at least in the short term. The big reason aggregation has raked in savings for consumers since 2010 is that ComEd and Ameren were locked into higher priced electricity contracts, which allowed suppliers to undercut the power giants. The last of those contracts expired months ago, and savings have gotten smaller for many communities.

For more information, including a checklist of questions to ask local leaders, read CUB’s fact sheet.