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The Village's Electricity Aggregation Program became effective Aug. 1, 2012 and renews with Constellation Energy on August 1, 2014. Most program participants will see the new rate from Constellation on their September 2014 ComEd bill others may see the start of aggregation billing in October. The reason for the differing effective dates is due to the timing of the properties' meter reading. Those meters read earlier in the month will show on the September 2014 bill, while those read later in the month will show on the next bill.

Should you have any questions on this or any other aggregation-related matter, contact Constellation at: 877-997-9995.

To file a complaint against dishonest retail electricity supplier solicitations, contact the Illinois Commerce Commission's (ICC) Consumer Services Division complaint line at 800-524-0795. Customers may also file a complaint online by visiting www.icc.illinois.gov/consumer/complaint.

Program details

In 2012, Hoffman Estates voters approved a referendum allowing the Village to create an electricity aggregation program on behalf of residents and businesses to reduce electricity costs. The Village, through its consultant, the Northern Illinois Municipal Electric Collaborative (NIMEC), solicited and reviewed proposals from several electricity suppliers certified in Illinois. For years 2012 through July 2014, FirstEnergy Solutions was the supplier. As of August 1, 2014, Constellation Energy is the electric supplier through July 2015. ComEd still provides delivery and billing for electric service.  

Hoffman Estates residents and small businesses will receive a rate of 7.93 cents per kWh over the one-year term. This compares with the current ComEd rate of 8 cents per kWh, which carries an additional "Purchased Electricity Adjustment" charge that is currently averaging 0.5 cents per kWh, for an effective ComEd rate of 8.5 cents per kWh.

Hoffman Estates electricity aggregation program vs. ComEd rate in cents per kWh

Supply + Transmission PEA Fee1 Effective Rate
Hoffman Estates Rate 7.93¢ none 7.93¢
ComEd Rate2 8.00¢ 0.5¢ 8.50¢

  1. The Purchased Electricity Adjustment (PEA) is variable, and is currently quoted at 0.5 cents per kWh. There is no PEA charge from your new supplier
  2. The ComEd price to compare of 8.00 ¢/kWh is an extrapolation of the four-month summer rate (7.034 ¢/kWh) and the eight-month winter rate (8.542¢/kWh)

This rate is for the energy supply only, and ComEd will continue to deliver your electricity as previously. Participants will continue to receive only one bill from ComEd, which will include the electricity supply charges from Constellation. ComEd will continue to deliver power and respond to any disruptions in service. Residents and businesses will continue to make payments directly to ComEd.

If you have any questions, call Constellation toll-free at 877-997-9995, Monday through Friday from 8 a.m. to 5 p.m., or visit their website at www.constellation.com. You can also contact Deputy Village Manager Dan O'Malley by phone at 847-781-2602, or by e-mail at dan.o'malley@hoffmanestates.org.

See links below for program information and recent notices:

Electric Aggregation Program Notice - July 11, 2014

Explanation of 2014 electric aggregation program

2012 Citizen article - new municipal aggregation program

General information

Overview – What is municipal aggregation of electricity?
An electricity aggregation program allows municipalities to pool residential and small commercial retail customers together for the joint purchase of electricity. By creating these economies of scale, a community can leverage the buying power of thousands of residents and small businesses in an effort to obtain a lower price for the supply of electricity.

There are two main components to electricity: supply and distribution.  The supply of electricity is currently generated by ComEd at power plants.  Electricity is then transmitted and distributed to homes and businesses through ComEd's infrastructure and power lines.  With aggregation, a muncipality can seek a lower price for the supply of electricity with alternative suppliers other than ComEd; however, ComEd would continue to distribute electricity to consumers through its infrastructure.  Therefore, ComEd would continue to send out electricity bills and be contacted for service needs.  Please read the below description and reference the attached FAQs for more information.

Legislation – Why is this possible?
In 2009, the state of Illinois amended the Illinois Power Agency Act with Public Act 96-0716 to deregulate the electric market and provide for the municipal aggregation of electricity. Through deregulation, ComEd is no longer the only company that supplies electricity, but continues to provide power generated by others through its distribution system.

Process – How does it work?
In order for the Village to create a municipal aggregation program, a referendum must be approved by a majority of voters. The Village Board approved a resolution at the Dec. 5, 2011, Village Board meeting providing for the referendum question to appear on the ballot on March 20, 2012. The referendum asked:

"Shall the Village of Hoffman Estates 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?"

After referendum approval, the Village created a Plan of Operation and Governance, and held two public hearings to discuss this plan. Once the plan was in place, the Village solicited proposals and bids from suppliers who are licensed as alternative retail electric suppliers (ARES) in the state of Illinois. Bids were reviewed, and the Village determined if and who it would enter into an agreement with for energy supply. If favorable pricing does not exist, the Village will not enter into an agreement, and remain with ComEd.

Impact – How will this affect me?
All residents and small businesses will be automatically enrolled in the program unless they "opt-out." Before the next cycle of the aggregation program begins, all residents would receive notice to opt out of the program.

Regardless of whichever option residents and businesses chose, ComEd remains the utility provider delivering electricity to homes and businesses. Residents would continue to receive a ComEd bill and would continue to call ComEd in case of an outage or service need. The only difference would be a change in the supply rate of the electricity bill.

History
Municipal aggregation programs have been active in Ohio for several years, and are now spreading across Illinois. Over 20 Illinois municipalities passed referenda on the April 2011 ballot to begin the aggregation process (see attached list of communities). Additional communities, drawn by lower supplier pricing, put referenda on later ballots to continue in the process of establishing a municipal aggregate program with the hope of providing savings for residential and small business consumers.

Resources

For more information about electricity aggregation, contact:

Dan O'Malley
Deputy Village Manager
847-781-2602
dan.o'malley@hoffmanestates.org

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Last updated: 9/18/2014 12:56:40 PM