Electricity Aggregation Consultant Approved; Cost Will Not Come Out of the City Budget

Elmhurst City Council members unanimously approved a contract with Northern Illinois Municipal Electric Cooperative to provide consulting services for electricity aggregation, but not before they took the time to clear up a few things.

The vote originally was part of the consent agenda, but Alderman Paula Pezza pulled the item for discussion because she wanted to make it clear to residents that the consultant's pay would not be coming out of the city's budget.

"There seem to be a lot of misconceptions," she said.

Prior to the vote, two residents of Gladys Street, Claude Pagacz and John Reboletti, spoke in opposition to the "hiring" of a consultant.

"I don't want public money spent on a consultant," Pagacz said.

Alderman Kevin York said the city is not hiring a consultant, per se.

"There will be no money coming out of the city's coffers for this," York said.

For the consultant to be paid, a March 20 referendum must first pass. The referendum will ask residents if they want the city to seek bids for cheaper electricity. If it passes, the city still is under no obligation to proceed with aggregation.

"We would only do aggregation if we could find a really good deal and save residents money," Alderman Chris Healy said.

At that point, if it makes sense to aggregate, residents who want to participate in the program would pay a $2 fee to the consultant out of the savings they will get by aggregating. Residents who don't want to participate may opt out and pay no fee.

"The $2 the people in the program pay would be more than offset by their savings," Healy said. "We had better be saving at least ten-fold that amount; I think it will be much more than that. The savings that are generated will more than offset the consultant's fee."

Alderman Steve Hipskind said the savings will probably be "100-fold, on average, if not greater."

It's important that the public understand what NIMEC is—and what it is not, Alderman Scott Levin said.

"This isn't a marketing consultant that is going to go out and help us sell this to our residents," he said. "The consultant is an energy professional who can help us develop a request for proposals that all of the aggregators will respond to, help us evaluate those and choose the best person with whom to do business.

"The consultant is far more of a technical person—it's a technical contract (more) than it is marketing."

The consultant also will help the city negotiate rates and provide ongoing technical assistance for the new program, and it will annually review the aggregators to make sure the city is getting the best deal. The cost for the consultant will go down after the first year because the education and referendum components will already have been done.

"The aggregator will still need to go into the marketplace after the first year and negotiate the next electricity purchase," York said. "There will be some effort expended to do that, but at a much lower rate in years two and beyond."

Several aldermen said they feel more comfortable having expert assistance.

"Obviously electric aggregation is a relatively new topic, and it's not something this city has a ton of expertise in," York said. "Even from the get-go, it was pretty clear we would more than likely use a consultant to help us."

Aldermen say they are confident the savings for Elmhurst residents who want to take part in the program will be noteworthy.

"It will be a significant savings for everyone in Elmhurst. It's really a pretty significant amount," Hipskind said.

Electricity Supplier Also Had Something to Say

Chuck Sutton, an Elmhurst resident, also spoke during the public comment portion of Tuesday's meeting. Sutton is president and founder of MC2, a licensed energy supplier in Northern Illinois.

"We are not a consultant. We are the actual supplier," he told aldermen. "We serve dozens of residents in the city of Elmhurst.

"While you are going through this aggregation process … I would ask the council to consider adding to the city's web site the (Illinois Commerce Commission) link to all of the licensed suppliers."

He said residents don't need to wait for a referendum to pass or for the city to negotiate a deal.

"250,000-plus residential customers are saving money today vs ComEd rates," he said. "There are dozens of suppliers out there, different programs. I would ask that you put the ICC link on your web site so people can get information."

This comparison of energy suppliers can be found here.

A list of communities that currently have an electrical aggregation program in place can be found here.