Electric Aggregation: What It Is and How It Affects You

- Editor's Note:  While termination of an aggregation agreement often results in a penalty, Constellation Energy says their agreement with the City of Rockford allows residents to cancel at any time without penalty.  As the story notes, however, electricity users in the Stateline area who are covered by aggregation agreements will likely see a sharp increase in rates, and are encouraged to shop around.

ROCKFORD – “I thought I was a wise shopper,” says Daniel Fenelon, one of many Rockford residents who are about to have their electricity rates rise sharply in the fall.

Fenelon gets his electricity from First Energy under a contract negotiated by the City of Rockford and the power company. 

That contract is set to expire in September.

Fenelon attended a workshop at the Zeke Giorgi Building on Monday which was hosted by the Citizens Utility Board.  The purpose of the workshop was to help educate local residents about energy costs, and how to save money.

The Utility Board has published a Checklist for Renters that’s aimed at helping new tenants avoid potentially costly pitfalls when moving into a new apartment. 

Fenelon says he’ll put the checklist to use.  “It’s four or five things to remind yourself of as you’re reading the contract,” he says.  “It may keep you from getting something you really didn’t want.”   The list can be found here.

Matt Harvey, a Citizen’s Utility Board Field Coordinator who was on hand at the event, suggests avoiding electric agreements that utilize a variable price rate. 

Variable rates are calculated by the utility company based on consumer demand of electricity, and can rise or fall as demand increases or decreases.

“When you have a variable price rate, it can jump extremely high [seasonally] and can cause your bill to significantly increase,” Harvey says.

In Rockford, as well as other municipalities within Illinois, the City has negotiated lower electric costs from providers other than ComEd, who use infrastructure leased from ComEd to deliver power to their customers.

The City’s current contract with First Energy uses a fixed rate that is currently at 4.66 center per-kilowatt-hour.

When that contract expires in September, customers will see an increase as the a rate rises to 7.37 cents per-kilowatt-hour (fixed) under a new agreement with Constellation Energy.

Harvey recommends that consumers who do not wish to be vigilant about their power consumption may want to opt out of the program and instead adopt the variable price rate offered by ComEd, which is currently 7.59 cents per-kilowatt-hour.  That variable rate may rise or fall during the term of the contract.

The contract with Constellation permits Rockford residents a three month opt-out clause, during which time they can opt-out of the program and purchase electricity directly from ComEd.

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