Chicago voters will get to decide this fall whether they want the city to negotiate lower electricity rates on their behalf.
The City Council today voted to put a referendum on the issue on the Nov. 6 ballot.
If approved by voters, Mayor
“The city has the potential to formulate a program that allows our citizens the ability to realize $200 million in savings,” said Ald.
The new rates, which could be as much as 30 percent lower than those now charged by ComEd, would then automatically show up on bills, perhaps as early as December if the city fast tracks the process. All customers would be given the opportunity to opt out of the bulk rates negotiated by the city and stick with ComEd.
Any savings could be short lived, because the contracts that obligate ComEd to purchase electricity at above-market rates expire at the start of June, according to the Citizens Utility Board.
But ComEd is locked into buying some of its power from traditional sources at higher rates well beyond June, so savings are certain beyond June, aggregation company representatives told aldermen at hearings on the issue.
If the city goes forward with so-called municipal electrical aggregation, it could for a time boost the rates of those still buying from ComEd.
On a call with reporters this afternoon, ComEd representatives said the company supports competition. As a "wires" company, ComEd does not make money off the energy it supplies to customers. It gets paid for delivering electricity, regardless of which supplier a customer chooses. If the lights go out, ComEd is still the one responsible for fixing the outage.
"We consider what's happening in the market place to be a very positive development," the company said.
ComEd said additional costs to consumers that come as a result of excess electricity the company has procured that will now have to be sold back to the market at a loss will be spread out over many years.
More than 250 Illinois communities already have adopted aggregation. If Chicago joins them, ComEd will have lost 70 percent of its customers by early 2013, according to the company.
Exactly how aggregation in Chicago would work in Chicago remains to be seen. The city could opt to look for a supplier that would build energy conservation and renewable energy sources into the contract.
The administration could launch a bidding process, or choose a contractor on its own — although Emanuel's staff has said the mayor wants "an open and competitive bid process."