Electric aggregation on ballots in area
URBANA — Community-wide programs to negotiate deals for residents' electric rates are still a popular topic statewide, and a consumer watchdog group says voters should know the facts before making a decision on the so-called "municipal electric aggregation."
Voters in rural parts of Champaign and Vermilion counties will be asked in referendums whether they are willing to allow the local government to negotiate their electric rates. And residents in Savoy, Mahomet, Ogden and St. Joseph will have the same choice.
In other parts of East Central Illinois, community electric aggregation proposals are on the ballots in Arcola, Arthur, Ashmore, Camargo, Cerro Gordo, Charleston, Chebanse, Coles County, Heyworth, Humboldt, Lerna, Lovington, Mattoon, Neoga, Normal, Paris, Paxton, Oakland, Randolph Township and Tuscola.
Those 26 municipalities are among 221 in Illinois where voters will decide whether to let their government act as a broker in dealing with companies who generate and supply electricity to homes and very small businesses.
It's part of another wave of ballot referendums on the electric programs. This past spring, about 200 Illinois communities approved and implemented programs that city officials — including those in Champaign and Urbana — have widely hailed as money-savers for residents.
But Jim Chilsen, spokesman for the Citizens Utility Board, said voters should educate themselves on what it would mean for their electric bill.
"We do want people to be armed with the facts when they step into the voting booth," Chilsen said.
Q: What is "municipal electric aggregation"?
A: The program allows government agencies to act as a broker for residents' electric rates, a function that was previously handled by the Illinois Power Agency. By bundling the vast majority of residential accounts and selecting the lowest-bidding electricity supplier, local officials believe they can get the best deal and lower rates for residents.
Q: Are those savings guaranteed?
A: Chilsen said aggregation programs in other areas have been good so far, but the programs have only been around for about a year, and in some cases, only months.
"People should know that, in the short term, that municipal aggregation has delivered significant savings for consumers," Chilsen said. "But the jury is still out on whether those savings will be long term."
Ameren Illinois has been locked into some higher-than-market-price contracts for several years, but the effects of those contracts on consumer prices are expected to disappear by June 2013, Chilsen said. That means electric rates from Ameren are expected to drop significantly.
If the electric aggregation programs are approved, Chilsen said, residents should make sure that whatever deal their government negotiates with an alternative electric supplier includes a rule that the supplier match the Ameren rate if the Ameren rate drops below the supplier's original rate. Or the contract should include an easy way out for residents.
Q: Does this mean Ameren will not serve residents anymore?
A: No. Ameren Illinois serves two functions: It primarily delivers electricity, but it also bills residents on behalf of the company that is generating the electricity. Those two functions are represented in two different sections of the monthly bill residents get from Ameren: the delivery charge and the supply charge.
Municipal electric aggregation affects only the supply side, for which Ameren actually is not responsible — they only bill you for it on behalf of the supplier. That won't change, and neither will the fact that Ameren is in charge of the power lines and billing you for it.
"That means if there's a power outage, you'll still call Ameren," Chilsen said.
That also means that Ameren can still change — for better or worse — the rate it charges for the delivery of electricity.
Q: If the referendum is approved, do individual residents have a choice to participate?
A: Yes. Government agencies are required by law to inform residents of the changes twice by letter: Once when their electric supplier is about to change and again when it has changed.
At both times, residents will have the opportunity to "opt out" of the program. That would mean those individuals can stick with the default electric rate they are already paying, which is generally higher than the aggregated rate. Or they could go out to market themselves and sign their own contract with an alternative retail electric supplier.
Chilsen said residents' jobs don't end when they leave the voting booth. If the proposals are approved — which the overwhelming majority are — then government agencies will still need to pick an electric supplier and negotiate a contract.
He said voters should keep a close eye on that process to understand how it affects them.
Champaign County Board Chairman C. Pius Weibel said the proposal, which would apply only to the unincorporated parts of the county, just adds another option for residents who can now choose between the default Ameren rate or the utility's Power Smart Pricing plan.
"This gives them a third choice," Weibel said.
He said, if anything, he feels a bit more comfortable with municipal electric aggregation since seeing how the cities of Champaign and Urbana have set up their programs after voters in those two cities approved the program in the spring.
"Some of the dust has settled from that first round," Weibel said.
Chilsen said the consumer watchdog group aims to remind customers of their options. Many consumers are on electric assistance programs or have already signed on with an alternative electric supplier, and municipal electric aggregation could affect those customers differently.
"It's a very popular idea now, and we're always supportive of consumers saving money," Chilsen said. "We're also supportive of consumers educating themselves."