County Board Looking at Buying Electricity in Bulk, March Referendum Following Fox River Grove’s and Harvard’s Example Possible

A presentation about how the McHenry County Board could help residents save 10% or more on electric bills by shopping around was made at the September 9th Legislative and Intergovernmental Affairs Committee.

The draft minutes of the committee chaired by John Heisler were so interesting, I thought you might like to read them. The relevant part follows:

Residential Aggregation of Electricity – David Hoover, Northern Illinois Municipal Electric Collaborative (NIMEC):

Mr. David Hoover, from Northern Illinois Municipal Electric Collaborative (NIMEC), joined committee members to provide a presentation on the Residential Aggregation of Electricity.

Electric Tower

NIMEC was formed in 1996 in order to take advantage of deregulation. This is a private organization. With the changes in regulations there is a county wide effort to lower individual electric bills. 80% of commercial entities have already changed their service and now they are trying to get the word out to the residential properties. There are advertisements being placed to try to get these residential customers to join various companies, one at a time.

Unfortunately residents have to be cautious, as there are some bad apples out there in this industry. The reputable companies are saving residents approximately 10% in energy savings.

There has recently been a big change to municipal aggregation. They now allow local governments to aggregate their residents to see if they can entice better pricing. In order to do this the local government is required to go to a referendum to see what the constituents want. The next time a referendum can run is in March of 2012.

During the last election cycle, 23 entities went out for referendum, 19 passed. Harvard and Fox River Grove had a referendum pass in their municipalities.

There are a number of municipalities keeping an eye on this issue because of the savings being realized by some of these entities.

Some of the municipalities have seen a savings of up to 23%.

The Aggregation of Electricity allows a city or County to negotiate prices on behalf of their residents.

Mr. Hoover noted that he believes that competition will increase because of the number of people joining the program.

If a resident does not like the program, they can elect to go back to ComEd or negotiate their own cost with their own company. If they go back to ComEd, they would have to remain with them for at least one year. They would also have to coordinate the termination and initiation of service with the two companies involved.

This program would cover all residents and small businesses in the county. Committee members were informed they could “aggregate” with other villages and would then be allowed to collect a “civic contribution” for the County.

This could provide an extra revenue steam for the County. Most of the suppliers involved in this program are willing to negotiate this fee into the contracts. When they aggregate with other villages it provides leverage for collective buying.

Electric meters would still spin as fast, but the cost per kilowatt would be cheaper under bulk buying of electricity.

The timeline would require that the referendum be on the March ballot. This would require that a resolution be approved by the County Board by their November 15th meeting. Bids would then go out in June with the power changes being made by late summer. The County Clerk would need to be notified by January 3rd in order to get this issue on the ballot.

Information meetings could then be held during the primary season.

Comittee members questioned if a resident from a Municipality, that does not offer this program, could join in on the County’s plan. Mr. Hoover stated he did not believe this could be done, unless they could create some type of two tiered system. He noted they may be able to “opt” in individually. He stated that he would look into this as it would be better if they could create some type of hybrid program.

Everyone is on the same time frame.

Most residents would see a savings of about $175 per year.

The down side of this program is that it would require staff time to work on the referendum process.

Committee members stated that the County should join with some municipalities in order to put bids out for everyone that passes a referendum in the County.

Committee members questioned what the challenges were in the areas where a referendum failed.

Mr. Hoover stated that most failed because of the lack of education on this issue. Committee member stated that they think this is a worthy program to pursue, especially since it means a savings for the residents.

Committee members were questioned on how they would like to have this presented to the County Board. It was suggested that a presentation, along with a Resolution be brought forward to the morning meeting in October for consideration. They suggested that the municipalities be invited so they can see the presentation along with the County Board. Mr. Hoover informed committee members that he is meeting with MCCOG representatives regarding this issue. Mr. Austin stated that this is a big topic at the Illinois Managers Association meeting as well.

It was suggested that a Resolution be drafted for this committee to review at one of their next two meetings.

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Perhaps this is a way to offset to some extent the rate hike supported by all our local Republican legislators that Governor Pat Quinn vetoed. I am sure some people don’t think I ever agree with Democrat Jack Franks. On this issue, I do.

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