Dolton residents have been paying the highest electric rates in Illinois the last few months, thanks to the community’s “municipal aggregation” deal.
Aggregation–when local leaders negotiate power prices with alternative suppliers on behalf of a community’s residents–was once a sure bet. Some communities secured a price that was nearly 50 percent better than the utility. But then the market changed, prices went up for all suppliers, and it’s been much more difficult for local leaders to secure savings.
In Dolton’s case, residents had been on a fixed power rate with Integrys Energy Services through January of this year. But local leaders failed to negotiate a new fixed rate, so residents were forced to pay a variable price, which changes on a monthly basis.
That was bad news for Dolton residents: Over the summer they paid a rate as high as 9.6 cents per kilowatt-hour. That’s more than 30 percent what ComEd charged (about 7.1 cents per kWh) then. Right now, the rate is about 8.18 cents per kWh.
The outrageous rates prompted CUB and AARP Illinois to issue a consumer alert to Dolton residents, telling them they could get out of the Integrys deal without having to pay an exit fee.
Aggregation harnesses the buying power of a town’s population to negotiate a lower electric rate. That’s a good idea, and there are still towns saving consumers money. (See the Illinois Commerce Commission’s complete list of aggregation deals.)
However, everyone in a town with an electricity deal should ask these three basic questions:
1) What rate am I paying?
2) How does it compare to the utility rate? (See info here about utility rates.)
3) Do I have to pay an exit fee to get out of the community deal?
Note: Chicago residents with questions about their aggregation power deal can read CUB’s fact sheet and try our free calculator to find out if the offer is right for them.
