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Special report: Community power deals

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At utility bill clinics across the state, CUB staffers often warn consumers about bad deals peddled by electricity marketers door-to-door, on the phone or via mail. But we also get a lot of questions about “community aggregation”—electricity deals that are negotiated by a town’s leaders for their residents.

Read CUB’s frequently asked questions about community power deals, as listed on PlugInIllinois.org, the state’s electricity choice website.

What is community (or municipal) aggregation?
Illinois law allows local governments to purchase electricity from an alternative supplier on behalf of their residents. (Your town or county had to pass a referendum to allow it to do so.)

Just like when you sign an alternative supplier deal on your own, your utility (ComEd or Ameren) would still be responsible for delivering that power to your home, and billing you for it.

How do I know if I’m on a community power deal?
No. 1: Consult the list on PlugInIllinois.org to see if your community is listed.

No. 2: If your community has an active power deal, see what alternative supplier is listed with it.

No. 3: Look at the supply section of your ComEd bill to see if that company is listed. (If the supply section says “ComEd provides your energy,” then you are not on the community power deal.)

Note: Most residents in a community with a power deal are automatically switched unless they opt out. So if a sales rep for an alternative supplier comes to your door and claims to want to sign you up for your community’s power deal, don’t sign anything or give out your power bill or account number. This could be a dishonest rep for another alternative supplier trying to lure you away from the community power deal. Municipal aggregation deals aren’t sold door-to-door. 

Is community aggregation a good deal?
It can be, but like any other choice in the market there’s never a guarantee of savings. It depends on the contract your community negotiates. In theory, municipal aggregation allows communities to use the collective bargaining power of residents to negotiate for lower power prices from suppliers, and overall, municipalities have done a decent job finding reasonable deals for their residents.

What should I know about ComEd’s price and community aggregation prices?
You should know:

  • On Oct. 1 ComEd’s electricity price will decrease from 7.358 cents per kilowatt-hour (kWh) to 7.292 cents per kWh through May 2019. This is the price you compare with community aggregation offers. (This price does not include the Purchased Electricity Adjustment, a credit or debit of up to 0.5 cents per kWh that changes monthly. That means it’s possible, but not guaranteed, that ComEd’s price can get as low as 6.792 cents per kWh or as high as 7.792 cents per kWh in a given month.)
  • Currently, there are about 180 community power deals in ComEd territory listed in PlugInIllinois.org.
  • WARNING: Dozens of deals expire in 2018 (52 in October, and 1 each in November and December). People in these communities should pay close attention to any new offer that is announced, and ask questions about it.

What questions should I ask about a community power deal?
What’s the price for the community power deal, and how does it compare with the utility’s price?

While it is a basic question, it is the key question for consumers: Will I save money with community aggregation? Ask community leaders to be clear about the price being offered and compare it with your utility’s “price to compare,” listed above. Also, find out if the alternative supplier promises to meet or beat the utility’s price over the course of the contract, as some have.

What if I want to leave the community power deal?
You can opt out of a community power deal at any time. Always make sure you can get out of a deal without having to pay an exit fee.

When does the community’s power contract end, and then what happens?
After your municipality’s agreement with an alternative supplier runs its course, will you automatically return to your utility’s rates, or will you become a customer of the alternative supplier your community contracted with? Check with your community leaders to find out.

Is the community power deal a “green” plan?
Many alternative power suppliers offer “green” plans. That means the company will take some of your money to buy Renewable Energy Certificates, or RECs, which ensure that a certain percentage of the power consumed will be put back onto the grid by renewable energy sources, like wind and solar power. Find out if your community power deal is a green plan, and if it will cost you extra. Green plans are a legitimate choice. Just remember, even if you purchase “green energy” from an alternative power supplier, it doesn’t mean the actual electricity you consume is from a renewable energy source—it just means that clean energy is added somewhere to the power grid. Read CUB’s fact sheet on green plans.

Are consultants advising my municipality on community aggregation, and if so, what fees are they charging?
Many communities obtain a consultant to seek out and negotiate power prices on behalf of residents. These consultants charge fees—taxpayer dollars—for their services. Make sure your municipality’s consulting fees, if any, won’t eat up your electric bill savings.

Does my community plan to accept fees from the alternative supplier it chooses?
Some communities take fees from alternative suppliers. If your community is considering such a move, ask local leaders how that impacts the price offered and what they plan to do with the extra money.

For more information, read CUB’s Guide To Municipal Aggregation.