Lower prices for electricity can be achieved by "municipal electric aggregation" if it's approved in Tuesday's election, but more discussion of the issue was warranted.
Who's against lower electric utility rates?
The obvious answer is nobody, so it will be no surprise if a ballot question seeking the endorsement of "municipal electric aggregation" is overwhelmingly approved in Tuesday's primary election.
But there's a lot more to this issue than just voting for lower electric utility rates. Of even greater concern is the last-minute push aimed at persuading voters that aggregation is the best way to go. There has been nothing resembling a serious public discussion of this proposal.
Champaign-Urbana will be among hundreds of Illinois communities voting on this issue in Tuesday's primary election. This massive electoral effort has been organized by a group of power suppliers, many represented by the for-profit Northern Illinois Municipal Electric Collaborative.
If local residents approve the measure, the municipality where they live will have the authority to negotiate residents' electrical utility rates from any of a number of power suppliers, presumably at a discount to what they're paying now.
According to promoters of the plan, consumers will be able to save up to 30 percent on electrical rates by using their group buying power. One caveat is that the big savings are not expected to last more than a year because ComEd and Ameren will soon be able to meet the competition by offering lower rates.
Here's the background. Illinois has allowed competition among power suppliers for roughly a decade, but the current electricity gold rush did not begin in earnest until the Illinois Commerce Commission decided to allow consumers to buy their power from independent suppliers while being billed through their utility company.
Once ease of entry was arranged, suppliers came into the Illinois market in earnest, and many consumers already have taken advantage of the opportunity to negotiate better rates.
Ameren and ComEd rates are currently locked in because of contracts they signed that will expire in 2013. Their competitors gained a price advantage when electrical rates dropped below the Ameren and ComEd contracted rates, and that's what makes this opportunity appealing for consumers.
But the shelf-life is brief — less than a year because utility company contracts expire at the end of the year and local aggregation will be not begin until July or August. The big savings won't last long because ComEd and Ameren will be able to negotiate lower rates to offer consumers. That's why the Citizens Utility Board, the consumer friendly state agency, hasn't taken a position on these ballot questions.
But, as Benjamin Franklin once said, a penny saved is a penny earned, and those who pay monthly utility bills will appreciate discounted prices for however long they last.
Consumers will not be forced to participate in this arrangement, assuming voters approve it. Municipalities will send forms to their residents allowing them to opt out of the arrangement and maintain the status quo. Those who do not opt out when asked are not prohibited from opting out later.
Further, consumers who do not opt out will not have to take any action because their utility company will continue to handle maintenance and billing.
Local municipal officials have made no secret of their support for this plan. Indeed, they have become active cheerleaders.
It was just a couple weeks ago that Urbana Mayor Laurel Prussing, accompanied by Champaign officials, held a news conference in which they touted the perceived benefits of supporting this proposal.
We're generally suspicious of massive electoral undertakings organized by private businesses. Obviously, they're in this to make a profit and there's nothing wrong with that as long as what they're selling is in the interests of consumers to buy. We do wish a few more questions had been answered before voters were asked to grant this authority to the cities.
That said, there may be an opportunity for individuals and businesses to cut their utility bills by using the power of numbers to negotiate a more attractive electrical power rate. The price advantage may not last long, but it's there, and for many it will be irresistible.
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