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CUB analysis: Community power deal could offer slight savings

As of July 31, 359 of 553 total active municipal aggregation deals in Illinois offer a price lower than the utility — ComEd or Ameren Illinois — according to CUB’s analysis of the Illinois Commerce Commission’s data on community power deals.

Compared to last year, this is good news for consumers living in a community with an aggregation deal. A similar analysis CUB conducted in 2020 revealed just 14 percent of deals had prices better than the utility, compared to about 65 percent this year.

Illinois law allows municipalities and counties to purchase electricity on behalf of residential and small-business utility customers, often called a community power deal or municipal aggregation.

Municipal aggregation works like buying in bulk. Local leaders use the collective bargaining power of all the households in the area to negotiate with an alternative electricity supplier with the goal of securing a lower or reasonable power price compared to the utility, or to provide 100 percent renewables to help meet sustainability initiatives.

Residents must approve of a community power deal through a referendum. Once they do, local leaders negotiate a deal, and most, if not all, customers are opted into service with the alternative supplier. However, you can opt out at any time.

Generally, CUB has been pleased that local leaders have been transparent about whether a community power offer is a better deal than the utility price — in contract to the misleading marketing that customers have reported from door-to-door sales representatives, telemarketers or mailers from alternative suppliers that are not connected to municipal offers. 

Of the 228 active community power deals in ComEd territory, the average price is 6.56 cents per kilowatt-hour (kWh), which is slightly lower than the utility’s current 6.776 cent price. For a customer who uses an average of 1,000 kWh a month, that works out to about $2.16 in monthly savings.

104 suppliers offered a cheaper deal than ComEd’s current supply price, and 77 offered a “matched” rate, meaning they pledge that their price will mirror the utility’s price. 47 of the 228 deals were more expensive than ComEd.

The average consumer on a municipal aggregation deal in Ameren territory also saved money. The average price of the 325 active deals in Ameren territory was 4.53 cents/kWh, coming in lower than the utility’s 4.821 cents/kWh price — 255 of those deals offered lower rates than Ameren. For a customer using 1,000 kWh a month, that’s about $2.91 in monthly savings. 

Losing municipal aggregation deals are still out there. The most expensive plan in ComEd territory offers 7.517 cents per kWh, about 11 percent higher than the current utility price. In Ameren territory, the highest-priced offer is 5.499 cents per kWh, currently about 14 percent higher than Ameren. However, the numbers show the average municipal aggregation deal on average currently has been offering a slightly better price than the utility. 

If your community has a deal with an alternative supplier, please review your bill and check to see if your negotiated price is lower than the utility. If it is higher, call your supplier to cancel and switch back to the utility.

Some municipal aggregation plans are marketed as “green” deals, offers connected to renewable energy. While practicing energy efficiency and taking part in special plans that help reduce electricity demand (Hourly Pricing, for example) are also options to be green, renewable energy plans are a legitimate option for consumers who are looking to support clean energy. That’s especially true if the offering is vetted through a transparent, reasonably priced municipal aggregation deal.

The ICC’s chart identified 26 active green deals in ComEd territory, with 22 of those offering a price lower than the utility. CUB dug a little deeper than the chart and uncovered green offers in at least 24 other communities. In all but one of those communities, the rate either matched or beat the utility price. Green plans have historically been more expensive than a regular offer — sometimes significantly higher — so CUB is pleased to see suppliers offering green community deals accompanied by reasonable prices. prices. 

Review CUB’s fact sheet on municipal aggregation for more information. Want to see if your community is offering a power deal? To see a full list of offers and prices, visit the ICC’s webpage, Plug In Illinois.