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McHenry County Electrical Aggregation Fact Sheet and Frequently Asked Questions
Recent statutory changes by the State of Illinois regarding the regulation of electrical suppliers have given residents the ability to purchase their electricity from electric suppliers besides Commonwealth Edison (ComEd). As part of those regulatory changes, local governments may also bid the cost of electricity on behalf of residents and small businesses as a way to reduce electric supply costs. This process is commonly referred to as residential electrical aggregation. However, in order to proceed with electrical aggregation as an "opt-out" program as described below, the County must first gain the authority to do so from its voters through a ballot referendum. On December 20, 2011 the County Board approved an ordinance to authorize placing such a public question referendum on the Tuesday, March 20, 2012, primary election ballot. The County's goal is to provide residents with as much information as possible to be fully informed of their options prior to voting.
Below are some frequently asked questions (FAQs) on electrical aggregation:
Q: What is electrical aggregation?
A: Electrical aggregation is a process which allows the County to pool, or aggregate the electrical needs of residents and small businesses together, and to then seek competitive bids from electrical energy suppliers for the cost of such electricity (purchased by kilowatt hour) used by the County's residents and small businesses.
Q: Why pursue electrical aggregation?
A: By pooling, or aggregating the entire electrical load for County residents and small businesses, the County can seek competitive bids from power suppliers approved by the Illinois Commerce Commission. The larger, aggregated load puts the County in a position to possibly obtain a more favorable electric supply rate for its residents and small businesses than is currently offered if you receive your electric supply from ComEd. Communities that have completed the aggregation process have received lower supply costs for their electricity provided to their residents and small businesses than the rate offered by ComEd.
Q: Why is the opportunity for electric aggregation available?
A: Governor Quinn signed into law Public Act 096-0176 on August 10, 2009, which amended the Illinois Power Agency Act, which was part of our state's original electric deregulation legislation. This is the final phase of the deregulation process. Until this Act was amended, only larger customers such as industrial, commercial, and governmental entities could participate, and currently a majority of these types of commercial electrical loads are purchased from sources other than ComEd. The new law now allows local governments to transfer their residents and small business owners' electric accounts to alternative electric suppliers through an electrical aggregation program.
Q: What is electric deregulation?
A: On December 16, 1997, the State of Illinois implemented a plan to deregulate ComEd. Under this plan, ComEd no longer generates electricity for its customers but continues to provide power generated by others through its distribution system. Deregulation means that power can be purchased through any one of the Illinois Commerce Commission-approved power suppliers.
Q: How does the electrical aggregation process work?
A: Under Illinois law, the County must place a public referendum question on the ballot asking its voters to give the County the authority to aggregate electric loads for its residents and small businesses and to seek bids for electric power supply for such aggregated loads. If the referendum is approved, the County must then hold at least two public hearings to discuss and create a plan of organization and governance for its electric aggregation program. Once such plan is in place, the County will prepare and publicize a request for proposals (an "RFP") to provide an electric supply to the County's residential and small business users. Only electrical energy suppliers certified and regulated by the Illinois Commerce Commission would be allowed to submit proposals. The bid that comes closest to achieving the goals of the aggregation plan could then be accepted by the County Board. However, if none of the bids meet the plan's goals, there would be no obligation on the part of the County Board to accept any of them, and the accounts of residents and small businesses within the County would continue to receive power from ComEd at their then prevailing rates. A resident or small business would have no obligation to participate in the County's electrical aggregation program and could choose to opt out of the program altogether.
Q: How does ComEd fit into the aggregation picture?
A: ComEd remains the distributor of electrical power, regardless of the supplier. If we switch to another power supplier, residents and small businesses will still receive their bills from ComEd, and ComEd will still be responsible for delivering the electric power and maintaining the electrical distribution system. The change will be virtually transparent to the end user.
Q: How does electrical aggregation impact me?
A: You will not notice a change under aggregation; you will continue to receive your bill from ComEd and ComEd will continue to deliver the electricity to your home or business. The only difference will be the potential for a reduced cost on the supply portion of your electric bill. To better understand this, it is helpful to have general knowledge of how electricity is purchased and distributed. Below is a brief overview of the companies involved in electrical power:
Generation Companies: These companies generate electric power and sell it to suppliers.
The aggregation process does not impact them.
Supplier Companies: These companies purchase electric power from the generation companies for resale. An electric aggregation program impacts your relationship with the supplier by allowing the County to secure competitive bids for an electricity supplier which would sell electricity to all residents and small businesses in the County who do not opt out of such program.
Transmitter Companies: A transmitter company is responsible for operating the grid that brings power to your home. ComEd is the transmitter for most of northern Illinois. Aggregation has no impact on the transmitter companies.
Q: What are the benefits of electrical aggregation?
A: The most important potential benefit for residents and small businesses in the County is that they may save money on electric supply costs.
Q: Where is the County at in the electrical aggregation process?
A: On December 20, 2011 the County Board approved an Ordinance to authorize placing a public question referendum on the Tuesday, March 20, 2012, primary election ballot.
Q: What does the referendum question ask?
A: The question on the ballot will read as follows:
"SHALL THE COUNTY OF MCHENRY, ILLINOIS, 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?"
YES _____NO _____
The purpose of the public question is to determine whether the County should be authorized to adopt an ordinance creating a program to allow the County to solicit bids and enter into service agreements for the sale and purchase of electricity and related services and equipment to residential and small commercial customers in the County who do not choose to opt out of such program.
Q: Do I have to participate in aggregation?
A: No. If this referendum passes, that only means that the County may seek bids on behalf of its residents and small businesses but approval of the referendum does not obligate either the County or you to actually complete the process. If, through such bidding process, the County does identify a supplier with a favorable rate and decides to proceed by approval of an electrical supply agreement with such supplier, you still have the option to opt out of the County's aggregation program when the County formally notifies its residents and small businesses of their opt out period. Specific instructions for doing so will be provided at that time.
Q: Can savings be guaranteed under an aggregation program?
A: Market fluctuations make it impossible to guarantee that bids would come in under the current energy rate paid by ComEd customers. ComEd adjusts its electric energy rate each May, therefore it is impossible to predict future ComEd rates and subsequent savings. The County can, however, structure its request for proposals so that the supply price will not be higher than the ComEd rate. Local governments that have completed the electrical aggregation process and have bid out their community's electric supply have received pricing that is currently saving their residents and small businesses money.
Q: What happens if a local government cannot purchase or negotiate lower electric rates than offered by ComEd?
A: Your account would stay at ComEd, and ComEd would remain both the provider of your power and the distributor of your power. Either way, ComEd would be your distributor.
Q: If aggregation means lower energy costs for customers, wouldn't ComEd simply increase charges on the distribution side to protect its profit margin?
A: ComEd owns the distribution system only and does not realize profits or losses from the sale of energy. ComEd has worked for several years with large commercial and industrial customers who have switched to third-party energy suppliers and remains supportive of other customers who switch to third-party suppliers. The Illinois Commerce Commission (ICC) regulations dictate that ComEd cannot introduce any separate or different distribution fees within local governments that have an electric aggregation program.
Q: If a referendum is approved, how long will it be before the program is implemented?
A: State law requires that certain steps be followed to approve and implement any electrical aggregation program, including the County's establishment of a plan of organization and governance for the program. Once such a plan is drafted, the County will hold two public hearings on its proposed electric aggregation plan and the proposed plan of organization and governance for such program, staff would seek competitive bids from energy suppliers via a formal request for proposals (RFP) process. Assuming a bid is received that meets the goals of the plan, a contract with that supplier would then be negotiated. The earliest possible date such a program could be implemented would be Summer 2012.
Q: I have received mailings from retail electric suppliers offering lower electricity rates now. What should I do?
A: As previously stated, the earliest the County's aggregation program is early Summer 2012. Consumers who decide to switch to a retail electric supplier before the County's program is available should consider several aspects of the retail supplier's offer:
Length of contract: Many retail suppliers require a minimum 1-year contract, which may prevent a customer from participating in the County's aggregation program.
Termination fees: Look at the cost of early termination. Some companies charge fees and others do not.
Q: What is considered a small business eligible for the aggregation program?
A: Small businesses are those which are currently classified as using less than 15,000 kWh/year. Your electric bill identifies your account classification.
Q: What component of the electrical bill will aggregation effect?
A: Aggregation affects only the electrical supply services portion of the electric bill which typically accounts for 65% to 70% of the electricity bill.
Q: If I were to participate in electric aggregation, would I get two bills - one from ComEd for delivering the power, and another from the company that provided it?
A: No. You will continue to receive your bill from ComEd.
Q: Who would take care of my power if there was a power outage?
A: ComEd, by law, will continue to distribute the power to your home or business and handle any emergency repairs and outages. | 
