Tinley Park is joining the growing number of municipalities looking to lower residents’ power bills through an electrical aggregation program that would allow the village to negotiate with electricity providers for lower rates.
A new state law allows municipalities to negotiate bulk electricity purchases from third party suppliers on behalf of its residents. Many surrounding municipalities have already started the programs or are considering them, including New Lenox, Oak Park, Orland Park, Frankfort and Mokena. In communities where the new program is underway, residents have seen savings of 15 to 20 percent on their ComEd bill, said Asst. Village Manager Steve Tilton.
“There’s pretty substantial savings,” he said.
Nothing besides the cost of the electricity should change for residents if the village moves forward with the program. ComEd would still be responsible for delivering the electricity and responding to service requests and customer relations, but it would no longer charge residents for the electricity itself, Tilton said. Residents would still receive bills from ComEd that include services charges for the company as well as an electricity supply charge that would be passed on by ComEd from the third party provider.
To start the program, a municipality first must ask its residents if they want to pursue the aggregation program through a referendum. In April 2011, 24 ComEd communities put the question on the ballot and 21 were approved, Tilton said. Tinley Park officials decided not to pursue the program last spring because the potential savings were still unknown. After reviewing results of other communities officials are ready to consider it again.
To get a referendum on the ballot for the March election, village officials need to approve an ordinance by November. It would be followed by two public hearings and a possible start to the bid process for a bulk purchase of electricity in August 2012. The new supplier could then begin serving residents in December with the first change to their bills arriving in early 2013, according to a village memo.
Tinley Park already receives electricity to run its pump stations and streetlights through a similar aggregation program it joined in 2007, Tilton said.
“It’s worked out very well for us,” he said. “Since that time the village has saved about $100,000.”
If approved by the village board next month, the referendum on the March ballot would read: “Shall the Village of Tinley Park have the authority to arrange for the supply of electricity for its residents and small commercial retail customers who have not opted out of such a program.”
If the referendum passes but some residents prefer not to be a part of the aggregation program, they can opt out and continue to receive electricity from ComEd. If the referendum fails, then the village can still move forward with the aggregation but only as an opt-in program, meaning residents who want access to the third-party rates would need to join the program.
Village officials agreed to consider the program until next week when they will bring it back for discussion during a committee meeting before the regular 8 p.m. village board meeting.
