About Governmental Electric Aggregation Programs
Illinois, like a number of other States, has deregulated its electric markets. This means electric consumers are able to choose a supplier other than their local utility to supply their electricity, ideally at a lower rate. The local utility continues to deliver the electricity, read meters, issue bills and maintain the distribution network that brings power to our homes and businesses. An amendment to the Illinois Power Agency Act, 20 ILCS 3855/1-92, allows local governments to assist residents and small businesses in their attempts to save through a process known as Governmental Electric Aggregation. Opt-out aggregation is a process that automatically enrolls eligible local residents and small businesses, unless they individually opt-out of the program (choose not to be included).
Electric Aggregation Program Update
Elgin residents passed an Electric Aggregation ballot initiative on March 20, 2012. This gives officials the authority, but not the obligation, to pursue an electric aggregation program through the efforts of the City. Following passage of the ballot, the City held two Public Hearings to explain their Plan of Operation and Governance.
The City of Elgin, working through their consultant, Independent Energy Consultants, has also completed a competitive bid process and has selected Direct Energy as the Program's supplier for a two-year period. Direct Energy is an Alternative Retail Electric Supplier (ARES) and their charges will replace the shoppable generation and transmission charges from the local utility company, Commonwealth Edison, (ComEd).
With “opt-out” aggregation programs all eligible residential and small commercial customers are included in the program unless they decide to opt-out. The participation rate for opt-out programs tends to be very high, and because of this, suppliers may be able to pass on lower rates. This program presents another option for our residents and small businesses in their attempts to manage their energy costs.
This program will impact only those residents and small businesses within the City of Elgin. This program does not guarantee savings but does present another valuable option for our residents and small businesses in their attempts to manage their energy costs.
State legislators have used a phased-in approach to deregulate the Illinois electric markets. It began in 1997 when the largest industrial customers were afforded the ability to choose an ARES. We have now reached the final stage of deregulation, and not only do individual residents have the right to choose their ARES, but communities can form Opt-Out Aggregation Programs to leverage that bulk buying power. Most of the residential and small commercial customer switching and savings are expected to come through Governmental Aggregation Programs similar to the City of Elgin's Program.
Electric Aggregation Frequently Asked Questions
What is an “opt-out electric aggregation program”?
Electric aggregation is a process that allows governments to pool, or aggregate, the electric usage needs of residents and small businesses. Local governments are then able to seek lower pricing for their residents and small businesses through a competitive bid process. Opt-out programs generally have high participation rates and thereby greater bargaining power than individuals have to negotiate lower electric rates from Alternative Retail Electric Suppliers (ARES). Eligible residents and small businesses are included in the program and permitted to opt-out, if they chose not to participate. The process is being modeled after successful programs in other states that have over 10-years experience with Governmental Aggregation Programs.
How will I sign up for the program? Do I Have to Participate?
Residents and small businesses have received an opt-out letter from Direct Energy that explains the program rates, terms and conditions. The notice also provided instructions on how to remove yourself from the program, if you think it is not right for you or your family. Residents had 21 days to make that decision. If you would like to remain in the program, simply do nothing and you will be automatically enrolled.
Supplier Enrollment Information
Direct Energy has been chosen as the supplier for the City's Electric Aggregation Program and we have obtained a low fixed-rate of 4.915 cents/kWh with 100% renewable energy credits. Residents and small businesses who were eligible for automatic inclusion in the Aggregation Program were sent Opt-Out Notices and the deadline for opting-out was July 24, 2012. If you have questions or would like to inquire about enrolling, please have your ComEd bill handy and call Direct Energy at 1-866-760-6040. Their call center hours are Monday through Saturday 7 a.m. to 4 p.m. CST.
What happens now that the ballot has passed?
You won’t notice any changes. Our local utility company (ComEd) will continue to deliver our electricity, read our meters and issue our bills. This simply gives the City of Elgin the ability to seek lower-cost electric supply for our residents and small businesses. We have taken the following action to start an Electric Aggregation Program.
- Held 2 Public Hearings to explain the details of our Plan of Operation and Governance that will be used to administer the City's Program;
- Issued a Request for Proposal inviting all eligible suppliers to bid to supply the City's Program; and
- Selected Direct Energy as the Program's Supplier.
- Direct Energy has issued an Opt-Out Letter that explains the rates, terms and conditions of the electric supply offer;
- Residents and small businesses had 21-days to opt-out if they do not wish to participate;
- Direct Energy has enrolled those customers who chose not to opt-out by July 24, 2012;
- Electricity is flowing under the new program; and
- ComEd will continue to read meters and issue bills that reflect Direct Energy's charges in place of the ComEd charges for generation and transmission