Municipal aggregation — when community leaders negotiate power prices on behalf of residents — was once a sure bet for electricity savings.
However, a Citizens Utility Board review shows changing market conditions have pushed up prices across Illinois, and hundreds of communities have either abandoned aggregation or moved ahead with plans that have higher rates than the utility companies.
“Although it’s still possible to save money with electric competition, the era of easy savings is over in Illinois,” CUB Executive Director David Kolata said.
Consumers have three choices for their electricity supply: Stay with the utility, Ameren or ComEd; switch to an alternative power supplier they choose; or go along with a supplier their community chooses.
The third choice is called “aggregation.” It takes a “Costco” approach to buying electricity: Just as the wholesale chain secures lower prices for household items by buying in bulk, aggregation is designed to secure lower electricity prices through the collective buying power of a community’s residents. Communities that want to launch aggregation programs must first pass a referendum.
In 2012, communities secured rates that beat utility prices by up to about 50 percent. Many communities still offer lower prices or at least comparable deals, but the electric market has become more expensive.
Kolata recommends consumers ask three questions:
- How does the per kilowatt-hour (kWh) rate I’m paying compare with the utility’s price?
- Is a monthly fee added to the offer and how does that affect the price?
- Do I have to pay an exit fee to get out?
“What we’ve learned is that the most reliable way to cut your electric bill is through energy efficiency programs like CUB Energy Saver and Peak Time Savings,” Kolata said.
CUB Energy Saver is a free online service that aims to help consumers cut their utility bills.
Aggregation prices are periodically updated on the Illinois Commerce Commission’s website.