Chicago aldermen are weighing whether to ask voters in November if the city should try to negotiate lower electric rates for residents and small retailers — a step approved by voters in more than 200 Illinois villages and cities in March.
The municipalities that have completed the process achieved savings of up to "$200 to $300 a year for the typical residential consumer," said David Kolata, executive director of the Citizens Utility Board, a non-profit utility watchdog group.
Those savings are expected to carry through until June 2013, when the electricity-purchasing contracts of ComEd and Ameren Illinois expire, Kolata told the City Council Finance Committee on Tuesday. Those contracts locked the utilities into prices that have since decreased on the open market.
"After that, I think the jury is out," Kolata added. "If you look across the country, there isn't that much evidence that you can consistently beat the utility price."
The council has until Aug. 20 to put a referendum on the Nov. 6 general election ballot. If voters signed off, a bidding and public hearing process would precede the selection of a supplier.
Mayor Rahm Emanuel is still weighing the idea because the process of negotiating bulk rates "is considerably more complicated than it is in smaller towns," according to a statement from his office.
"We are willing to consider any and all ways to reduce the cost of electricity for residents, and are looking into this concept to determine whether it would save money for taxpayers," the statement said. "We must first determine if there are real cost savings before signing on to the referendum proposal."
Some Illinois villages and cities first turned to so-called municipal aggregation last year. It allows them to negotiate group rates for the purchase of electricity, which is still delivered by the major utilities at fixed rates. Homeowners who want to opt out of the new electricity purchase rates can.
Illinois has allowed competition among suppliers for a decade. In 2010, a state decision that allowed electricity suppliers to bill through ComEd made the option more popular.
Today, 80 percent of businesses have alternate suppliers, but residents face a confusing array of choices, and in some cases hard-sale tactics, so they have been far slower to sign up.
"There are a lot of people out there today — snake oil salesmen," said Ald. Richard Mell, 33rd.
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