Municipal Electric Aggregation for residents and small business owners
Municipal Electric Aggregation brought twofold successes to Illinois residents and the communities in which they live, work and play. From 2011 to 2018, residents cumulatively saved tens of millions of dollars on their own home electric bills. In 2018, programs pivoted to focus on renewable energy options as signs of advancing climate change continued while pricing available through the Electric Utility achieved ten year lows.
Does my community currently have an Electric Aggregation program? Visit http://www.pluginillinois.org/MunicipalAggregationList.aspx to search for your municipality (incorporated or unincorporated area) to discover if it is currently engaged in an Electric Aggregation program.
Why does it exist? In 1997 the Illinois legislature undertook deregulation of electric supply. In 2009, Governor Quinn signed into law Section 1-92, enabling municipal bodies in Illinois to present a Referendum for vote which, if passed by majority voters, enabled electric aggregation. The Referendum question was this: “Shall [municipality name here] have the authority to arrange for the supply of electricity for its residential and small commercial retail customers who have not opted out of such program?” As of 2021, voters in 835 cities, villages, counties and townships in Illinois had passed the legislation by majority vote. The programs enabled communities to seek bids for a large swath of the community with the expectation of receiving more competitive offers and favorable terms in a large group-purchasing process.
What has been the result of Customer Choice and Electric Aggregation in Illinois? Success— by multiple measures! Research from multiple entities reported its great successes including a joint report on the improved price position of Illinois since the commencement of Customer Choice by of the Illinois Chamber of Commerce, the Illinois Manufacturers’ Association, the Illinois Retail Merchants Association, and the Illinois Business Roundtable. The resultant lower prices and higher generation efficiency have greatly benefited Illinoisans:
Competition era price trends in the 14 Customer Choice jurisdictions have been more favorable to customers than price trends in the 35 traditional monopoly regulation jurisdictions (“Monopoly States”), with average electricity prices falling against inflation in Customer Choice Jurisdictions, but far exceeding inflation in Monopoly States.*
Customer Choice Jurisdictions, as a group, have outperformed Monopoly States in generation, attracting billions of dollars of investment in new, more efficient generation, resulting in higher capacity factors than in Monopoly States and parity in resource adequacy to meet load.*
The five states of the Industrial Upper Midwest offer a compelling intra-regional example of the success of Customer Choice, with the competitive states Illinois and Ohio outperforming the Monopoly States of Indiana, Michigan and Wisconsin with lower price trends and greater generation efficiency.*
Illinois for the win: Of the 48 contiguous states, Illinois ranks number one! From 1997 to 2014, Illinois experienced the lowest percentage increase in all-sector nominal average prices. In the summer of 2010, residents in ComEd territory were paying more than 9¢ per kWh for the default supply rate available through ComEd.** By the Energy Year 2021-2022, the default supply rate available through ComEd had declined to an annualized 7.457¢ per kWh. Following the Covid-10 pandemic and invasion of Ukraine, natural gas prices spiked worldwide creating upward pressure on power rates. The ComEd base rate increased to 9.665¢ in winter 2023.
How did this start? Deregulation of the monopoly that was electric supply was the revolutionary brainchild of Philip R. O’Connor, PhD, former chairman of the ICC and the renowned father of “Customer Choice”—as Phil was know to eschew the word “deregulation.” (Phil, a nationally-recognized expert on the development and implementation of competitive strategies, furthered his commitment to public service with volunteer service in the U.S. Embassy in Baghdad as an advisor to the Iraqi Ministry of Electricity.)
What is the current ComEd rate to compare? For copious detail and the current month’s rate, visit here.
If I participate in Municipal Aggregation, will I receive two bills? No. ComEd is required to do all billing for your account to include electric supply, delivery, and taxes. ComEd delivers electricity, and continues to bill you, but ComEd does not generate electric power.
If receive assistance on my ComEd bill through a program such as PIPP or LIHEAP. How does this affect me? If you currently are receiving assistance through such programs, your status will be unaffected by participating in an aggregation program, and you will continue to receive those benefits.
Will the reliability of my power service be affected if I enroll in an aggregation program and no longer receive supply from ComEd? No. ComEd is required by law to maintain system reliability. ComEd has been designated POLR, or the Provider of Last Resort. Should you experience a power outage, always report it to ComEd at 800-334-7661.
How does a Renewable Energy Certificate (REC) work? View this video clip produced by the EPA.
Why support renewable wind generation resources? For the ten years ending 2017, coal-based generation in the US has been reduced 40% whereas wind-based generation increased by 638%. Wind energy helps to reduce carbon footprint. Additionally, this program achieves a strategic objective of the Metropolitan Mayors Caucus Greenest Region Compact.
*Evolution of the Revolution: The Sustained Success of Retail Electricity Competition by Philip R. O’Connor, PhD and Erin M. O’Connell-Diaz
**Because ComEd has not generated power since deregulation of supply, the supply rate available through ComEd is for power purchased on behalf of ratepayers who do not select an alternative supplier. This rate is established by the Illinois Power Agency (IPA). Meaning “ComEd rate” is somewhat of a misnomer; it could be described as the default rate established via IPA power purchases. ComEd receives no monies for supply and is therefore revenue neutral. Following the Customer Choice regulation, ComEd continues to deliver power and is responsible for all billing for residential and small business ratepayers.