NOTICE OF PUBLIC HEARINGS - April 24 and May 8 at 7 p.m. in Council Chambers
On Tuesday, March 20, Oak Forest voters approved a referendum to allow the City of Oak
Forest to seek bids for lower electric rates for residents and small business owners – who
have not opted out of such a program – from suppliers other than Commonwealth Edison.
The electrical aggregation referendum received considerable support with 65 percent
approval from voters.
Read the press release.
Frequently Asked Questions
How can the city purchase power at a potentially lower cost?
Deregulation allows the city to shop for power and purchase in bulk for residents and small businesses at a lower price.
What is deregulation?
On December 16, 1997, the State of Illinois implemented a plan to deregulate Commonwealth Edison (ComEd). Under this plan, ComEd no longer generates electricity for its customers but continues to provide power generated by others through its distribution system. Deregulation means that power can be purchased through any of the 23 Illinois Commerce Commission approved power suppliers.
What is electrical aggregation?
Electrical aggregation allows local governments to bundle – or aggregate – residential and small commercial retail electric accounts in an effort to seek bids for a cheaper source of power. Currently, ComEd customers receive electricity at a price set each year by the Illinois Power Agency, a governmental body that secures electricity on the wholesale market on behalf of ComEd. By bundling residential and small commercial accounts, municipalities can go out into the open market to seek a lower rate for electric power. Since 1999, large industrial and commercial customers have used this option to reduce electricity costs.
What are the benefits of aggregation?
The most important benefit is the opportunity for residents and small businesses to save money on electric supply costs.
How does the program work?
Under state law, the municipality must place a referendum on the ballot to ask voters to give the municipal government the authority to aggregate electric accounts and seek bids for power generation. Once voters have approved the referendum on the March 20 ballot, the municipality will hold at least two public hearings to discuss and create an aggregation plan. Once the plan is in place, municipal staff, with the assistance of energy experts, would prepare and publicize a request for proposals. Only energy suppliers certified and regulated by the Illinois Commerce Commission could respond. The bid that comes closest to achieving the goals of the aggregation plan would be accepted.
What if the city cannot purchase or negotiate lower rates than ComEd?
If none of the bids meet the plan's goals, there is no obligation to accept one, and the aggregated accounts will continue to receive power from ComEd at the prevailing rates. A resident or small business has no obligation to participate and could choose to opt-out of the program altogether.
Am I obligated to participate?
No. Any account holder may opt-out of the program and remain on ComEd's supply service rate. The opportunity to opt-out will be available up to the time of program implementation. Customers will receive notice information of the opt-out period, who to contact, and how they must communicate their intention to opt-out.
What is ComEd's role in this program?
ComEd distributes electricity, but does not generate it. As the local electricity distributor, ComEd is responsible for infrastructure, like power lines that bring electricity into homes and businesses, responding to outages and billing. ComEd will continue to bill customers for electricity usage regardless of the supplier of that electricity. ComEd, by law, will still be paid to distribute the power to homes and businesses and handle any emergency repairs.
If I participate, will I get two bills – one from ComEd for delivering the power and another from a company that provides it?
No. ComEd will remain responsible for billing customers for all electricity, regardless of the electric supplier. The only change would be the name of the electricity provider on the bill's electricity supply.
I am currently enrolled in ComEd's budget program where you are able to spread out your ComEd electric service costs evenly throughout the year. Will the new provider have this or a similar program?
The Request for Proposals will request that this program is included in the bid specs.
If voters approve the referendum, how long will it be before the program is implemented?
State law requires certain steps be followed to approve and implement the Electric Aggregation Program. If voters give the municipality the authority to pursue aggregation, two public hearings must be held to gather citizen input for an aggregation plan that outlines goals such as savings targets. Once the plan is created and adopted, municipal staff would seek competitive bids from energy suppliers via a formal request for proposals process. If a bid is received that meets the goals of the plan, a contract would be negotiated.
Why is the city doing this?
The City of Oak Forest does not benefit from electrical aggregation. The city's goal – like the 200 other municipalities currently pursuing electrical aggregation – is to secure lower electric supply rates for residents and small businesses in our community.
Where can I get more information?
Please call City Hall at 708-687-4050.
|
|
