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Electrical aggregation has saved $1.5 million

Published: Wednesday, Feb. 20, 2013 9:27 a.m. CDT

The city of Morris has saved its residents and small businesses about $1.5 million in electric power costs since switching its power supplier about 13 months ago.

In April 2011, a referendum passed to allow the city to take bids on electricity supply for the city’s residential and small commercial use through an opt-out program. People receive their electricity bills from ComEd because ComEd is still the distributor, but the city now tells ComEd from where to get the electricity.

"The average home is saving $287 per year," said David Hoover, executive director of Northern Illinois Municipal Electric Collaborative (NIMEC), the electric purchasing co-operative the city utilized to find the lowest power supply rate.

Hoover updated the Morris City Council on the savings during its regular meeting Monday.

The city of Morris was in the first group of 20 municipalities in the state that took advantage of the electrical aggregation program, said Hoover. 

"Since then, 456 other communities have followed suit. You all were up front of this initiative," he said.

Chicago is just beginning the process now, said Hoover.

By grouping the city's residents and small businesses, NIMEC took bids from about 40 suppliers and went with one that was about 35 percent lower than ComEd's rate. ComEd's current rate is 8.3 cents. Morris customers are paying 5.43 cents.

ComEd does not lose money through this process because it is still paid by the other suppliers as a distributor. If a resident or business wanted to stay with ComEd as their supplier, they had the option to opt out of the program.

Morris has 3,141 residents signed up for the program and 238 small businesses.

"I'm pleased to say it has gone exceptionally well," said Hoover.

Audience member Bronco Bojovic asked if the bids for the power supply were advertised publicly. Hoover said they were not public and that requests for proposals were sent to a number of consulting companies.

Bojovic said there are suppliers out there now that have a lower rate than 5.43 cents and, if the bid opening were advertised publicly, Morris could have received a lower rate.

Hoover said there are lower rates now, but when the city of Morris went for bid in November 2011 and signed its 20-month contract, Morris had the lowest rate available at 5.43 cents.

If the city chooses to do the electrical aggregation program through NIMEC again, supplier bids will be opened again in September. Just like the first time, if ComEd's rate comes in lower than the bids, the city will stick with ComEd.

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