Business & Tech

Village Board: Electrical Aggregate Plan Put to Referendum

Lake in the Hills village leaders are moving forward with plans to form a municipal electricity aggregation program.

Lake in the Hills voters will decide whether or not to empower the village with the authority to negotiate lower electricity rates on behalf of all residents and small businesses wanting to participate in the program.

The Lake in the Hills Village Board on Thursday unanimously approved an ordinance placing an Electricity Aggregation Program referendum question on the March 20, 2012 election ballot.

Municipal aggregation allows local governments to bundle, or aggregate, residential and small retail electric accounts together and buy electricity at a group rate. 

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The practice is similar to how communities negotiate contracts for waste disposal and cable television.

Several other communities are proposing the program to their constituents including Huntley, Prairie Grove, Lakewood and McHenry, said Village Administrator Jerry Sagona.

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The McHenry County Council of Governments also is working with McHenry County and several other communities to coordinate a joint aggregate purchase of electricity for residential customers.

Sagona said electricity aggregation programs are the hot topic among civic leaders right now and can save consumers anywhere from 15 to 30 percent on their power bills.

If the village contracts with a new power generating company, ComEd would continue to handle consumers’ billing and outages. ComEd distributes electricity, but does not generate it. Aggregation programs do not impact ComEd financially, according to documents shared with village trustees.

Illinois legislation gives communities the authority to bring residents and small businesses together to buy electricity as a group and negotiate a rate. There are two options: an opt-in program and an opt-out program.

An opt-in program can be established without a referendum and only includes customers who choose to participate in the program, according to information provided by Sagona to the board.

Opt-in programs do not take advantage of bulk purchasing.

The opt-out program must be approved by a referendum and includes all eligible customers, unless they choose not to participate in the program. Residents could “opt out” after bids are received and the rates and supplier are identified, according to the informational documents.

LITH trustees have decided to pose the opt-out program to voters. Most municipal programs operate as opt-out programs because they have the largest number of customers, which allows the municipality or consortium greater ability to negotiate a better rate.

The referendum question on the March ballot will read: “Shall the village of Lake in the Hills 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 program?”

 


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