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The Village's Electricity Aggregation Program became effective Aug. 1, 2012. However, most program participants will have seen the new lower rate from FirstEnergy Solutions Corp. (FES) on their September 2012 ComEd bill. Other participants will see the new lower rate effective with the next ComEd bill. 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 2012 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 FES at 800-977-0500.

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.

Calculate your savings

If you are a participant in the Village's Electricity Aggregation Program, you are (or will soon be) enjoying lower electricity rates. Visit the easy-to-use website below to "see" your savings. It only takes about 30 seconds to calculate your monthly/annual savings:

www.MyComEdBill.com

Program details

On March 20, 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. As a result, the Village signed a two-year contract with FES to provide the supply of electricity to residents and small businesses as part of the Village's electricity aggregation program. This program will greatly benefit program participants, and will continue for a two-year term through the July 2014 billing cycle.

"The Village is incredibly pleased to present this opportunity to our residents and businesses, which will provide a 41.6 percent savings on their electricity supply costs," said Mayor William D. McLeod.

FES was chosen for this aggregation program due to their competitive rate of 4.96 cents per kilowatt hour (kWh). Other program benefits include 100 percent renewable (green) energy, no early termination fees and a civic contribution. The agreement also includes a provision that if the ComEd rate drops lower than the program rate, FES will match the lower rate. Therefore, program participants are guaranteed that savings over the next two years.

Hoffman Estates residents and small businesses will receive a rate of 4.96 cents per kWh over the two-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.This means residents will receive a 41.6 percent savings over the current ComEd rate. FES estimates that residents consuming an average electric load usage in Hoffman Estates may save up to $320 in the first year of the program.

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

Supply + Transmission PEA Fee1 Effective Rate
Hoffman Estates Rate 4.96¢ none 4.96¢
ComEd Rate2 8.00¢ 0.5¢ 8.50¢
Your savings off the ComEd supply rate: 41.6%

  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 FES. 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 FES toll-free at 866-636-3749, Monday through Friday from 8 a.m. to 5 p.m., or visit their website at www.fes.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.

Click here (PDF) for the July 2012 Citizen newsletter, which features a cover story on the new Electricity Aggregation Program.

Option for electricity savings for Hoffman Estates businesses

In August 2012, the Village's Electricity Aggregation Program became effective for residents and small businesses in Hoffman Estates. The definition of "small business" was changed earlier this year by the ICC to mean only those businesses that use 12,000 kilowatt hour (kWh) per year or less. This definition change excluded many Hoffman Estates businesses from being eligible to participate in the new program, and, therefore, from enjoying the savings offered on electricity costs. The Village continued to seek savings opportunities for our local businesses, and found a program available to those businesses not eligible for the Electricity Aggregation Program.

Metropolitan Mayors Caucus Energy Savings Program (ESP)
This program is offered through the Metropolitan Mayors Caucus, and is in cooperation with Integrys Energy as the electricity supplier. The program offers a rate of 5.35 cents per kWh from June 2012 through October 2013. There is also 24 and 36 month options. Based on ComEd current and future rates, this program could provide savings of 40 percent to 66 percent to local businesses.

To sign up, visit www.integrysenergy.com/esp, or call 877-549-8790 and ask for the ESP's business program rates. Questions on this program can be directed to ESP Program Manager Craig Schuttenberg at 773-491-1564.

The Village continues to look for savings for our residents and businesses, and hopes this electricity savings program will provide your business with lower energy costs.

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 next ballot on March 20, 2012. The referendum asks:

"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?"

If the referendum is approved, the Village may create a Plan of Operation and Governance, and hold at least two public hearings to discuss this plan. Once the plan is in place, the Village can solicit proposals and bids from suppliers who are licensed as alternative retail electric suppliers (ARES) in the state of Illinois. Bids are reviewed, and the Village determines if and who it will 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.

Based on the timing of the above process, a Village aggregation program would not become effective until late summer or fall of 2012 at the earliest.

Impact – How will this affect me?
If an aggregation program is created, all residents and small businesses will be automatically enrolled in the program unless they "opt-out." Before 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). Other communities, drawn by lower supplier pricing, are considering putting referenda on the March 2012 ballot 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: 11/29/2012 3:52:13 PM