Will Chicago Adopt Energy Aggregation?

Chicago voters this November may choose to ask the city to negotiate lower electricity rates on behalf of homeowners.

Savings are estimated at about 30 percent, which could amount to $200 million across the city in the first 17 months.

“That $200 million is money right back into the community that folks can use to pay for gas, pay for groceries and those types of things,” said Ronnie Cardwell, a vice president at Integrys Energy Services, one of the companies expected to vie for the contract if a referendum question is approved.

Consumer advocates have questioned whether the savings would start to diminish sooner, when contracts that obligate ComEd to purchase electricity at higher rates expire a year from now….

Under so-called municipal electrical aggregation, rates negotiated by the city would show up on the electric bills of residents and small businesses that haven’t already negotiated lower rates on their own. Customers can chose to opt out.

More than 240 cities and villages have taken the aggregation route since April 2011. They have been able to save up to $300 a year for the typical residential customer, said David Kolata, executive director of the Citizens Utility Board.

Exactly how aggregation 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. Officials could launch a bidding process, or choose a contractor on their own — although Emanuel’s staff has said the mayor wants “an open and competitive bid process.”

The city also could elect to take a cut of savings, as some downstate communities have done. That could pump millions of dollars into city coffers each year. Emanuel’s staff said that issue has yet to be considered.

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