What is Electric Aggregation And Should I Vote for It March 20?
</element><element id="paragraph-1" type="body"><![CDATA[Voters in Du Quoin and Pinckneyville are waiting for the devil to pop out of the details on the March 20 referendum concerning "electric aggregation."
That's a mouthful.
There's no devil, just some short term savings and long term unknowns.
The word "aggregate" simply means to "gather up into a whole." In this case it means: Do the majority of voters in Pinckneyville and Du Quoin want to let their city councils go out into the electric marketplace and find a cheaper electric rate than what Ameren (actually the Illinois Power Agency) charges?
The refenda on ballots in Du Quoin and Pinckneyville read the same. Here is the question on the ballot: "Shall the City of Du Quoin (Pinckneyville) have the authority to arrange for the supply of electricity for its residential and small commercial residential customers who have not opted out of such a program?
___Yes
___ No
Am I voting to take Ameren's electricity out of the lines and put some other utility's power into the lines?
No! Ameren doesn't have pink electricity which would be replaced by blue electricity if the towns decide a company like Direct Energy should be their supplier.
Like oil that comes from the earth, then goes to the refineries to make gasoline, its the same oil from the same earth but winds up being sold as Casey's or Shell or MotoMart or BP gasoline. The prices may vary, but at the end of the day it's just gas. Who knows and who cares?
The same is true of electricity. It is generated by power plants all over, is accounted for when it leaves the generating plant and goes into the nation's power grid. It's no longer Ameren's electricity or Com Ed's electricity or Direct Energy's electricity.
It's just electricity.
When your light bulb lights or your electric stove heats you don't ask "who made this electricity?" Again: Who knows? Who really cares?
It's a commodity like corn or oil or silver. It's neither pink nor blue. But, it has value based on supply and demand.
Illinois law now allows towns and counties to purchase electricity on behalf of residential and small-business utility customers living within their corporate limits (that is what you are voting on). While municipalities choosing community "aggregation" (voting as a whole) would be responsible for negotiating the price of power from a supplier other than the traditional utility like Ameren, your utility would still be responsible for delivering that power to your home, and billing you for it. In theory, communities could use the collective bargaining power of residents to negotiate for lower power prices from suppliers.
The City of Du Quoin began seeing a substantial savings three years ago when it switched from Ameren to Direct Energy. Other homeowners can (and have already) switched to one of seven providers on their own.
Take Direct Energy--one of the seven--which simply replaces its cost of electricity for Ameren's cost of electricity on your Ameren bill. You will still get only one bill and because Ameren is the utility provider it is required under franchise agreements to take care of your neighborhood power lines and your electric meter. There is no change. If your power line falls you will see Ameren linemen working out of Ameren trucks to repair them.
If the referenda in Du Quoin and Pinckneyville pass: Would I automatically be billed at the rates my community negotiates?
It depends on the community. If a community passes a referendum approving electricity aggregation, residents who don't wish to participate would have two opportunities to "opt out" of the program:
1.When the community sends out an initial letter notifying residents that their electricity supplier will change, and
2. When the utility sends customers a letter notifying them that their electricity supplier has changed. After receiving the utility notification, residents generally have 10 days to opt out. The same rules apply to residents who already purchase electricity through an alternative supplier. If they wish to keep their current supplier, they must opt out of their community's negotiated rates.
If a community fails to pass a referendum you will stay with Ameren, but can pick another provider on your own.
Would community aggregation lower my electric bill?
Whether or not residents will get lower electricity rates would depend on the contract their community negotiates. The goal is lower rates. If not, residents can opt out of the program.
The consumer watchdog--the Citizens Utility Board (CUB)-- supports a community's right to buy electricity from an alternative supplier, in principle. However, it remains to be seen whether community aggregation will lead to real savings for consumers over the long term.
Here's why. What Ameren pays for and charges for electricity is generally based on a three-year average price for power: 1.) what it has been 2.) what it is and 3.) the forecast for what it will be.
Independent companies like Direct Energy largely buy based upon the spot price--what it is now. Right now, electricity is a commodity in a buyer's market. In two, five or 10 years that could change and consumers could see their immediate savings of 16 to 20 percent disappear.
And, some equate deregulation to no longer being able to regulate price increases. That can happen, too. After all, utility companies are in this to make a profit and their staffs are generally smarter than the people regulating them.
That brings us to these thoughts for the sake of transparency.
It was Nick Hill, son of longtime and retired Du Quoin finance commissioner Cha Hill who approached the cities of Du Quoin and Pinckneyville about electric aggregation (there's that word again). He works for a company called "Select Energy" which represents not a utility, but instead an idea that buying power from someone besides Ameren may be cheaper.
Nick is the young man from Du Quoin who recently signed with the Green Bay Packers football team. He is paid for what he does--getting towns to consider electric aggregation. His job is simply to suggest it is something worth considering. Towns all across the country are taking this route--aggregating customers. The Hills are also friends of Mayor John Rednour.
That's not a good or a bad thing with respect to this referendum. It's just a relationship.
Nick simply saw an opening for the townspeople to potentially save money on their light bills and approached both councils about getting the question on the ballot.
You can vote either way. The worst that can happen is you stay with Ameren and continue to enjoy the long and reasonably regulated relationship you have had.
The best thing that could happen is that you may save 16 to 20 percent on your light bill--at least in the short term.
All of this came on short notice: 1.) It was thrown into the county clerk's lap with very little time to add this question to the March 20 primary process, and 2.) Because of the time constraints there was no provision to let voters in the unincorporated area (out in the county) be part of this, as well. There may be in the future.