Committee Powers Up Talks of Alternative Electricity Provider

What if the city of Elmhurst could negotiate a better price for electricity for residents and businesses?

The city's Finance, Council Affairs and Administrative Services Committee lit the fuse under talk of electricity aggregation Monday night.

Seventh Ward Alderman Mark Mulliner explained that an electricity aggregating company brings large numbers of users together to negotiate better electricity rates than currently offered by ComEd. City Manager Jim Grabowski told the committee that he and city staff have attended seminars on the concept, and the suburbs of Oak Brook, Grayslake and Lincolnwood recently signed a deal to purchase power from a non-ComEd vendor.

According to , the towns locked in a two-year fixed rate of 5.52 cents per kilowatt-hour for residential service and 5.45 cents per kilowatt-hour for commercial service from Integrys Energy Services Inc.

President and CEO John Quigley told the committee that small commercial chamber members already have the chance to get power from MidAmerican Energy, and these businesses end up saving about the cost of one month's electricity bill per year.

The key to working with an alternate power vendor, Quigley said, is to know when to lock in a rate and for how long.

“You need flexibility to protect you against rate fluctuations,” he said.

Fifth Ward Alderman Scott Levin noted that consumers are being bombarded with offers from third-party electricity providers, but often don't know how to evaluate these offers. However, if the city takes the lead on researching alternate power providers, residents and small businesses can be assured of the vendor's worthiness.

Grabowski cautioned that aggregation often does not mean a complete break with ComEd. For example, in the tri-suburban deal involving Oak Brook, Integrys will supply the electricity and ComEd will remain the delivering entity.

The first step would be to ask residents via referendum if they would like to purchase electricity from an aggregator. Residents and small businesses would be able to opt out of any plan to purchase electricity from a new vendor. In order to seek bids next year, the City Council would have to approve a referendum by early January for the March ballot. This process occurred earlier this year in .

City staff will conduct more research on the issue, and the idea will return to the committee in November.