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Community Choice Aggregation

On March 20, 2012 residents of the City of Darien passed a referendum authorizing the City of Darien to negotiate with electric suppliers to provide electricity for the City of Darien. The City of Darien held public hearings to discuss the program, and passed a Plan of Governance to ensure Darien followed proper procedures and gave residents an opportunity to review the governance of the plan. These electric suppliers are different than ComEd because they provide electric generation through the use of coal, natural gas, nuclear power, wind, solar, and other sources, while ComEd is responsible only for the poles, lines, and physical infrastructure. The City of Darien went to bid and received responses from nine different suppliers, with Direct Energy providing a bid giving Darien the lowest electric supply charge in the State of Illinois at that time. The City of Darien entered into a contract with Direct Energy for two years at .0454 per kilowatt hour, which is approximately 40% less than the current ComEd rate. In addition, residents can enter or leave the program individually at any time throughout the contract without a penalty or fee.

Letters have been mailed from both Direct Energy and ComEd to advise residents of the changeover. If you would like to call and cancel, the telephone number for Direct Energy is (866) 760-6040. If you have any questions on the program, please contact Scott Coren at (630) 353-8104.

Community Choice Aggregation

Darien City Council recently passed an Ordinance placing a question on the upcoming March election ballot. The referendum question is “Shall the City of Darien 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?” Prior to the referendum, residents will of course have questions. The following Q & A attempts to answer many of those questions.

Question: How can the City purchase power at a potentially lower cost?

Answer: Deregulation allows the City to shop for power and purchase in bulk for our customers at a lower price.

Question: Who will take care of my power if there is an outage?

Answer: ComEd, by law, will still be paid to distribute the power to the homes and businesses and handle any emergency repairs.

Question: What if I don’t want to participate in the program?

Answer: Residents will have multiple opportunities to “opt out” of the program, which will be your right by law.

Question: How do I opt-out of the program?

Answer: Customers will have a few chances to opt-out of the aggregation program, but must do so before the City service begins. Customers will receive notice from ComEd informing them of the opt-out period, who to contact, and how they must communicate their intention to opt-out. The Illinois Commerce Commission has yet to determine the course of action to be taken if a customer who opted out, decides to rejoin the Community Choice Aggregation option at a later date.

Question: What happens if the City cannot purchase or negotiate lower rates than ComEd?

Answer: Your account would stay at ComEd and ComEd would be both the power provider and the local distribution company. Either way, ComEd will be our distributor. By voting yes on the referendum, Com Ed will then have to compete with power suppliers from throughout the Midwest to provide our power.

Question: Why is this opportunity available?

Answer: This is the last part of the Deregulation Process. Until this Act was amended, only larger customers such as industrial, commercial, and governmental entities could participate. Three fourths of this commercial load is currently purchased from sources other than ComEd.

Question: Why is the City of Darien doing this?

Answer: The City does not profit from this. We, as a governmental organization, are trying to take advantage of the new law to benefit our residents and small business and save them money.

Question: 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 power provider have this or a similar program?

Answer: The City will request that this program is included in the bid specs.

Question: What happens if the new power provider cannot meet its demand? Will we see brownouts? Would there be a surcharge to cover the costs of getting power from another supplier?

Answer: In the unlikely event that a supplier could not deliver the contracted power, ComEd would provide and deliver power to the City residents. The Illinois Commerce Commission reviews all power suppliers to ensure that they can meet the demand. NIMEC and other energy consultants continue to work with the Illinois Power Agency and the ICC to adopt rules which will alleviate these concerns.

Question: If aggregation means lower energy costs for customers, won’t ComEd simply increase charges on the distribution side to protect its profit margin?

Answer: ComEd owns the distribution system only, and so does not realize profits or losses from the sale of energy. ComEd has worked for several years with large commercial and industrial customers who have switched to third-party energy suppliers, and remains supportive of other customers who switch to third-party suppliers. In other words, there will be no impact on distribution rates, Per ICC regulations, ComEd cannot introduce any separate distribution fees on cities that aggregate.

Once again the City of Darien does not profit from Community Choice Aggregation. We, as a governmental organization, are trying to take advantage of the new law to benefit our residents and small business and save them money.

 

 

 

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