Community Choice Aggregation Yielding Dramatic Savings for Illinois Electricity Customers
For Immediate Release: May 23, 2012
Recent contracts guarantee participating communities significantly lower rates
CHICAGO — To date, more than 250 communities in Illinois have approved referendum measures that enable community choice aggregation (CCA). More than 90 have negotiated rates that offer customers the opportunity to save up to 30 percent on their electricity bills.
“CCA programs give local governments the ability to pool their residential and small business electricity loads to secure reduced electricity rates,” said Illinois State Representative Mike Fortner (R), who sponsored the original CCA legislation.
The most recent procurement contracts between communities and their new power suppliers feature energy rates that range from approximately 4 cents to 5 cents per kilowatt-hour, with over half coming in at a low 4 cents. All are significantly less than the new default rate of about 8 cents. A 3-cent rate reduction per kWh could yield a total savings per household of about $300 annually, or $300 million over a one-year period for all Illinois electricity customers in the program. See the Illinois Commerce Commission website for a list of select CCA cities and their contracted energy rates: http://1.usa.gov/IU8PQV.
“Aggregation — a sort of Groupon for electricity purchasing — is a critical step toward putting power in the hands of the people,” said Perfect Power Institute ™ Executive Director John Kelly. “In negotiating with suppliers for better pricing plans, communities are simply adding electricity to the list of services they already manage, such as garbage and water. And because they choose their power supplier, communities can help address residents’ demands for cleaner power as well.”
According to the Local Energy Aggregation Network, which promotes CCA nationwide, Illinois is the fastest-moving CCA state in the nation, with support for the program growing since enabling legislation was passed in 2009. In Illinois, when CCA is passed via referendum in a municipality, their customers are automatically enrolled, though they can opt out.
“This most recent surge of Illinois communities choosing to aggregate their power purchasing demonstrates a growing awareness around the benefits of CCA,” said Buffalo Grove Deputy Village Manager Ghida Neukirch. “Communities like ours are seeking more control over their relationship with electricity providers and want the ability to directly negotiate with utilities to procure lower, cheaper, cleaner and more efficient electricity on behalf of their residents.”
The CCA movement began in California, where it was passed into law in 2002. Marin County was the first U.S. community to take advantage of CCA. Today, CCA is enabled by law in Ohio, New Jersey, Massachusetts and Rhode Island, in addition to Illinois and California.
The Illinois Community Choice Aggregation Network (ICCAN) was formed to support Illinois municipalities pursuing CCA with best practice standards that favor communities, consumers and local businesses and that ensure key protections are included in energy supply contracts. ICCAN exists to provide member communities with access to independent, experienced and affordable resources that make local government and its residents and businesses a top priority in the municipal aggregation process. The ICCAN is led by former Illinois Power Agency Director Mark Pruitt and is a partnership between The Galvin Center, LEAN Energy U.S. and the Perfect Power Institute.
The Perfect Power Institute ™ is a new nonprofit that works with electricity industry leaders to dramatically improve power reliability, efficiency and environmental stewardship. As the next phase in the Galvin Electricity Initiative’s efforts to catalyze system transformation, the Institute evaluates system performance and promotes customer engagement as key to strengthening cities and businesses. For more information about the Perfect Power Institute and its groundbreaking program for assessing microgrid design and performance, please visit www.perfectpowerinstitute.org.