North Shore Residents Will Save at Least 41% Annually on Electricity Rates Starting This Summer as Consortium communities negotiate savings under one of the largest aggregation programs in Illinois

Less than one month since the March 20 referendum, the North Shore Electricity Aggregation Consortium (“Consortium”) announced a new rate for electricity that will yield at least 41% savings off the current Commonwealth Edison residential electricity rate, and save residential customers hundreds of dollars annually. This is one of the largest aggregation groups under a single form agreement in Illinois.

Over the next three years, MC Squared Energy Services, LLC (“mc2”), the Consortium’s selected alternative electricity supplier, will supply power to an estimated 60,000 to 70,000 Consortium customers. The Consortium communities locked in electricity rates of 4.836 cents per kilowatt- hour (“kWh”) through the May 2013 ComEd billing cycle. The current ComEd residential rate is 8.233* cents per kWh. New rates through mc2 are anticipated to begin in June and July.

As an added bonus, Lake Forest residents and small business customers will receive the benefits of the 100% Green Power Program. Lake Forest is proud to promote the importance of ecology and conservation. In 2009, the award-winning LEED-certified Municipal Services Building was completed, and the City Council continues to foster and support green initiatives in Lake Forest. Continuing with this effort, included in Lake Forest’s electricity savings are Renewable Energy Certificates (RECs) to cover 100% of residents’ electricity supply requirements, supporting renewable energy.

Official correspondence from the Consortium communities regarding electricity aggregation will be mailed early next week to eligible residential customers via regular postal service. At that time, customers will have 21 days to determine if they want to “opt-out” of the municipal program. Under this “opt-out” program, all residential and small commercial retail customers (those whose annual usage is 15,000 kWh or less) will be switched automatically to mc2, unless the customer affirmatively opts-out of the program and continues service through ComEd or another provider. Residents and small businesses that have already switched to an alternative provider will be able to “opt-in” to the municipal aggregation program; those residents and businesses should contact mc2 directly at (888) 808-7731 or email at NorthShore@MC2energyservices.com for more information about registration.

mc2 responded to the Consortium’s request for proposals for electricity aggregation services and was the lowest responsible bidder of seven vendors that submitted proposals. As part of the agreement with mc2, the Consortium communities will review electricity rates annually within the 36-month time period to ensure that customers are receiving the best possible rate.

On March 20, voters in all eight Consortium municipalities approved a referendum authorizing each municipality to operate an “opt-out” electricity aggregation program for its residents and small businesses. Through an intergovernmental agreement, the Consortium has been working together since December 2011 and engaged the consulting firm Intelligent Power Partners and the law firm of Holland & Knight LLP to provide professional expertise to the Consortium.

Under this program, residents will also have the opportunity to support renewable energy resources through a Green Power Program that purchases renewable energy certificates. To learn more about mc2, please visit www.mc2energyservices.com.

The current ComEd Basic Electric Service Rate in effect from October 1, 2011, through May 31, 2012, including the Purchased Electricity Supply Charge, Transmission Services Charge and the April 2012 Purchased Electricity Adjustment Charge.
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All of the North Shore Electricity Aggregation Consortium members' referenda passed and Consortium members are currently reviewing a contract with an alternative electricity supplier.   The Consortium remains on track with its goal to switch over to an alternate electricity supplier during June of 2012.

As Lake Forest moves forward with the process, it is important that residents stay informed.  Many have reported receiving calls from alternate suppliers and have expressed that they do not have all the information they need to make an educated decision.  The Citizen Utility Board (CUB) is a great resource for those evaluating their options. CUB's Guide to Municipal Electricity Aggregation can be found by clicking on the following link:  Citizens Utility Board web site

The Citizens Utility Board can also be reached directly by calling 1.800.669.5556.

 Electrical Aggregation:  Frequently Asked Questions

In November 2011, the Lake Forest City Council approved Resolution 11-23 authorizing that a question regarding electrical aggregation be placed on the March 20, 2012 election ballot. This question is as follows: 

“Shall The City of Lake Forest 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 a program?”

As a homeowner or small business owner, you may be wondering what this question means, and how it may or may not impact you. Below are several Frequently Asked Questions (FAQs) that will help you better understand electrical aggregation and what it means for consumers.

1. What is electrical aggregation?

On August 10, 2009, Governor Quinn signed into law Public Act 096-0176, which allows municipalities to arrange for the provision of electricity to residential and small commercial retail customers by alternative electric suppliers (i.e. suppliers other than ComEd). Under the new law, the City may seek bids for the provision of aggregate electricity supply services to these customers, in hopes that the selected rate will be lower than the standard rate offered by ComEd.

Electric aggregation combines the retail electric loads of customers, in this case with thousands of customers from eight communities. By combining the electrical loads, the community can leverage the buying power of thousands of residents and small businesses.

2. What is the referendum on the March 20, 2012, election ballot?

As indicated above, voters will be asked whether the City of Lake Forest should 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 a program.

Should the Referendum pass, the City will then seek competitive bids utilizing the North Shore Electricity Aggregation Consortium (a joint purchasing cooperative consisting of eight communities: Lake Forest, along with Deerfield, Glencoe, Lake Bluff, Highland Park, Northbrook, Park Ridge and Skokie) in an effort to obtain bids that would secure a lower electricity rate for residents and small commercial users. Once bids are received and it is determined that savings can be realized for consumers, a contract will be negotiated to lock in the rate. Once the contract is approved, the City will work with ComEd and the new provider to ensure that all individuals eligible for the new rate are automatically transferred to the new supplier unless they have previously opted out.

If the Referendum does not pass in one or more of the eight Consortium communities, the communities that do approve the referendum and ordinance will still proceed with an aggregation program. If the Referendum does not pass in Lake Forest, the City of Lake Forest will not be able to participate in the Consortium’s joint purchase.

3. If the electrical aggregation referendum is approved, what does that mean?
Approval would allow the City to move forward with the aggregation process, including the establishment of an electricity price pursuant to the Request for Proposal issued by the City and its consortium partners.

If the referendum does not pass, the City would not move forward with the aggregation process. Additionally, citizens will continue to be subject to the rates set by ComEd under State regulations.

4. Can I utilize a non-partisan ballot during the primary election?
According to the Lake County Clerk’s Office, a voter can utilize a non-partisan ballot during a primary election and that ballot will only contain the referendum question. For more information, please contact the Lake County Clerk’s Office at (847) 377-2410.

5. When would the City seek competitive bids?

If the Referendum passes, the City, along with the North Shore Electricity Aggregation Consortium, will seek competitive bids in spring of 2012. It is expected that the new rate would be effective during early- to mid-summer 2012. The request for proposals (RFP) requires suppliers to provide prices for 12 months, 18 months, 24 months and 30 months.

6. How can a third party sell electricity cheaper than ComEd?
If the electrical aggregation referendum is passed, the City hopes to obtain less expensive energy in bulk. The reason the energy is less expensive is at least two fold. First, because the City is part of a larger consortium, there are economies of scale that could be achieved by buying in bulk, a purchase that includes eight communities. Second, the City would be going out to bid with direct suppliers. Going directly to the source is hoped to provide savings.

7. How would the provider be selected?
The City of Lake Forest has entered into an electrical aggregation consortium with seven other communities. Those communities, with the help of an energy consultant, have drafted a Request for Proposal, which includes stringent requirements of the suppliers. Only suppliers who meet the requirements outlined in the Request for Proposal would be considered.

8. Would the City select the electricity supplier if the referendum passes?
Yes, as long as the rate secured by the Consortium is lower than what is available through ComEd. No contract would be entered into that did not save residents money.

9. Will there be a public information process?

The City will provide information regarding both the referendum and, if the referendum is approved, the bidding process, through its normal communication outlets including the City’s website (www.cityoflakeforest.com), newsletter and Facebook page. In addition, the City hosted two public hearings as a component of the aggregation process. These public hearings were held in Lake Forest on February 6 and February 21 as part of the regularly scheduled City Council meetings.

10. Are all residential units in the community eligible?

All residential customers would be eligible (except those receiving ComEd’s Residential Space Heat Rate – see question 14 below; those participating in hourly pricing programs; and those with existing supply contracts with an Alternative Supplier) unless they choose to opt out of the City’s bidding process.

11. I have a small business – does this impact me?

It may. The Act designates that residents and small commercial retail customers are eligible for aggregation. Small commercial retail customers have been defined as having a peak demand of less than 100 kW.

12. What if I have already switched to a new provider prior to the City seeking bids?

A number of electricity providers have been soliciting individual customers regarding opting out of ComEd’s rate on an individual basis. If you already have done so, you have likely been locked into a rate and into a contract with that provider. Should the City bidding process realize lower rates than you have through your own provider, you will still be able to opt-in to the City’s competitively bid rate, but only within the structure of the existing contract with your provider. In addition, unlike those users who are still receiving their electricity supply from ComEd, you will not be automatically switched over to the new provider. You may also be subject to early termination fees or other restrictions with your current provider. You should check with your provider to better understand any restrictions or policies that might apply.

13. What if residents / small businesses don’t want to participate in the City’s rate?

Residents and small businesses may “opt-out” of the program if the referendum is passed. Before the aggregation program begins, all residents and small businesses would receive an opt-out notice in the mail from the City and be given a date by which they must return the opt-out notice or call a number to request to be opted-out of the program. Additionally, ComEd will also contact residents to ensure that they intend to allow their accounts to be enrolled in the program. Residents using a third party supplier or residents moving to Highland Park from outside the community would not be automatically included; they would have to “opt-in.”

14. I live in a building that currently receives ComEd’s Residential Space Heat Rate. Will the Consortium’s joint bid process impact me?

No, residents of buildings currently receiving the Residential Space Heat Rate will not participate in the joint bid due to the fact that the Residential Space Heat Rate is heavily subsidized by ComEd and likely lower than the joint bid rate. Check your bill to determine if this impacts you.

15. What component of the electrical bill will aggregation effect?

Aggregation addresses only one of the three components of an electricity bill. The three components are supply (where the power comes from), transmission (getting the supply from its point of origin or from the high voltage grid), and distribution (getting the electricity from the substation to the consumer’s meter). Aggregation concerns only the supply component, which is typically at least 50% of the electricity bill. The transmission and distribution parts of the bill will be unaffected by aggregation.

16. Will there be any difference or disruption in service because of aggregation?

No, there will be no disruption in service. The only difference will be that the energy received will be from a different supplier at lower, more stable rates. ComEd would continue to deliver energy to homes and businesses. Residents and businesses would also continue to receive a ComEd bill and utilize ComEd payment options such as Budget Billing and Automatic Payment. Any outages or requests for service would continue to be directed to ComEd.

17. What if my power goes out – who should I call?

ComEd is responsible for ensuring that electricity flows through its distribution network to all homes and businesses in Highland Park. Aggregation would not change how ComEd responds to outages. Outages should still be reported to 1-800-EDISON-1.

18. What is the incentive for ComEd to not only continue to provide electrical services, but to also improve services as needed if the City aggregates?

ComEd is mandated by law to deliver electricity and to make necessary improvements to the transmission system, regardless of where the source of energy is purchased.

19. Will there be a “green energy” component to the newly bid rate?
All bidders will have to provide at least 7% of cleanly produced energy to comply the 2012-2013 Renewable Portfolio Standard. The request for proposals that the North Shore Electricity Consortium communities will use will solicit offers for higher levels of less polluting energy sources, up to 100%, and the cost associated with those higher levels. If the Referendum passes, and a contract is brought to the City Council for approval, the Council will determine what percentage of less polluting energy and the associated rate that will be provided to the community.

20. ComEd has indicated that they will be making system improvements to deal with reliability. Does this change any of those commitments?
No. This process does not impact ComEd’s commitments to the City to improve its system and to address reliability issues.

 

Alternative Residential Electricity Supply Services Referendum Question on March 20, 2012 Ballot

Lake Forest, Illinois – On August 10, 2009, Governor Quinn signed into law Public Act 96-176, amending the Illinois Power Agency Act to allow municipalities to arrange for the provision of electricity to residential and small commercial retail customers by alternative electric suppliers (instead of ComEd). Under the new law, a municipality may seek bids for the provision of aggregate electricity supply services to residential and small commercial customers, in hopes that the selected rate will be lower than the standard rate offered by ComEd. The legislation contemplates an “opt-out” program in which all residential and small commercial retail customers would be switched automatically to the alternative supplier selected by the City, unless a customer affirmatively opts out of the program and continues service through ComEd or another provider. However, in order to seek competitive prices for an opt-out electricity aggregation program, the City must first obtain approval from residents through a referendum.

On September 26, the City Council approved a resolution to authorize placement of a referendum regarding an opt-out electricity aggregation program on the March 20, 2012, primary election ballot. Voters will be asked if the City should be given the authority to seek competitive pricing bids for electricity services and to enter into a single contract that would include residents and small businesses if lower electric bills can be realized.

The City is a member of the North Shore Electricity Aggregation Consortium, a group of eight north suburban municipalities working together to identify potential electricity cost savings. The other members of the Consortium are Deerfield, Glencoe, Lake Bluff, Highland Park, Northbrook, Park Ridge and Skokie. Collectively, the Consortium’s members will collaborate for the duration of the bidding process and seek prices for the aggregated electricity load of the municipalities that approve the referendum. If the referendum is approved in Lake Forest, the City will proceed with the bid solicitation process, even if the referendum is not approved by the voters of any of the other Consortium members.

If the referendum is approved in March, bids will be solicited for the Consortium’s aggregated electricity load. The Consortium intends to seek proposed pricing for one-, two- and three-year terms. The bids will be compared to ComEd’s current rates, and the City only intends to approve a bid that will result in lower electricity prices than the current ComEd rates. Approval of the referendum does not obligate the City to implement an opt-out electricity aggregation program. If a program is implemented, all residential and small commercial retail customer accounts will automatically be moved to the new supplier; however, information will be provided in advance of the change to residents and commercial retail customers who may choose to opt-out of having their account transferred to another supplier and prefer to remain with ComEd.

Please note that, under an opt-out electricity aggregation program, ComEd will remain the distributor of electricity in the City; the selected alternative supplier will merely generate the electricity provided and deliver it to ComEd for distribution. Additionally, customers will continue to receive electricity bills from ComEd. Likewise, ComEd will remain responsible for all distribution system issues, including power outages.  

To view the Consortium's Plan of Governance, please click here:  Plan of Governance