Electricity deals may spur Northfield referendum
Updated: August 23, 2012 10:53AM
Suburbs near Northfield have scored big, short-term savings for consumers since voters gave their villages the authority to negotiate on their behalf with alternative electricity suppliers.
Teaming up with other towns, suburbs like Wilmette, Kenilworth, Northbrook and Glencoe have locked in rates through mid 2013 that are lower than ComEd’s current rate by 35 percent and more. The lower rates cut consumers’ electricity bills by 20 to 25 percent, once distribution charges and taxes are included.
While Northfield bypassed a referendum in the March primary election, village trustees are now considering a question for the Nov. 6 ballot. The Village Board has moved up its August meeting by one day, to Aug. 20, in order to meet the legal deadline to approve a binding referendum question.
“We believe municipal electrical aggregation offers real savings for our residents, and that the largest savings are likely to be achieved through an opt-out program,” said Village Manager Stacy Sigman.
Under an opt-out program, the village would negotiate for all residents and small businesses that use less than 15,000 kilowatt hours per year. Customers would automatically be moved to the new supplier, but could opt out of the arrangement and continue to use electricity purchased by ComEd.
Sigman said the village discussed electrical aggregation in 2011 when there was great uncertainty about ComEd’s rates and the impact on the potential savings from municipal aggregation.
“Now we are seeing the success that other consortiums are going to have,” said Sigman.
Glenview voted in June to put a referendum on the November ballot. Northfield’s neighbor to the east, Winnetka, owns and operates its own electric utility and purchases power wholesale through the Illinois Municipal Electric Agency.
Municipal officials note the difference between ComEd’s supply rates and those of alternative providers is likely to be much smaller in mid 2013. ComEd, a distributor of electricity, is still locked into some energy contracts set when prices were higher and the last of those will expire in June.
“This is really a commodities market and you are trying to make a change in anticipation of what is going to happen in the market,” said Sigman. “You really have to look at it year after year.”
Many of the rate deals negotiated by towns so far are set to expire in mid 2013, even though the contracts run for several years.
If Northfield residents approve a referendum, the village most likely would join a consortium, such as the Lake Shore Power Alliance made up of Wilmette and Kenilworth. Glenview also has had discussions with the group.
“They received the lowest bids, though some individual towns may have done better,” Sigman said.
The alliance negotiated rates with MC Squared Energy Services that, for now, are about 50 percent lower than ComEd’s average rate of 7.77 cents per kilowatt hour for summer and non-summer months.
When Kenilworth approved its contract with MC Squared, trustees chose to pay a bit more for a 100-percent renewable energy plan: 4.11 cents per kilowatt hour as opposed to 4.04 cents. The village required MC Squared to provide the equivalent of 100-percent clean power through the purchase of renewable energy credits. In Wilmette, customers will have a choice between the regular energy plan or a lower rate using 7 percent renewable energy sources, the minimum requirement under state law.
Under any aggregation program, customers continue to receive a single bill from ComEd with the supplier’s charge for the energy included. ComEd also continues to be responsible for the wires, poles and all emergencies, including the restoration of power following outages.
Northfield citizens are invited to hear a presentation on electrical aggregation at the board meeting set to begin at 6 p.m. Monday at Northfield Village Hall, 361 Happ Road.