Politics & Government

Voters May Choose Whether Montgomery Can Negotiate for Lower Electric Rates

A new state law allows municipalities like Montgomery to negotiate with power companies to find the best rate for their residents. Voters would have to pass a referendum to make it happen.

Montgomery residents may soon get the chance to decide whether to take advantage of a new state law that allows municipalities to choose an electricity provider.

At Wednesday’s Committee of the Whole meeting, Director Mike Pubentz explained the idea to trustees. A state law that took effect in January of 2010 allows municipalities to negotiate electricity rates for their residents and small businesses, obtaining better rates as a whole than individuals would likely be able to.

Montgomery would work through the Northern Illinois Municipal Electric Collaborative, a group of 140 government entities that negotiates with electricity companies. The village has been working with NIMEC since 1997, to obtain lower rates for its water pumping and street lighting energy.

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Village residents currently get their energy from Exelon, as delivered by ComEd. (Since 2003, ComEd has been an energy delivery company only. Parent company Exelon generates the electricity ComEd delivers.) Under the new proposal, Montgomery would negotiate for lower rates on behalf of residents and small businesses.

If a lower rate can be found from a different energy company (such as BlueStar or Constellation), the village would sign a one-year deal. But if ComEd still has the lowest price, village leaders can stick with them. And should residents want to, they could opt out of the program and stay with ComEd.

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No matter who the village goes with, ComEd would handle billing, and would still be the company residents call with problems. Except for a lower rate on the power portion of their ComEd bill, Pubentz said, residents would see no change.

It would be up to residents whether the proposal goes through—state law requires it to be passed through referendum. The next time it could appear on a ballot is the March 6, 2012 primary, and at Wednesday’s meeting, the five trustees present voiced their support for the idea. (Trustee Bill Keck was absent.)

Pubentz said the Village Board would need to pass an ordinance placing the referendum on the ballot by Nov. 15. If the referendum passes in March, he said, residents could start seeing savings by July or August of next year.

Nineteen local municipalities, including North Aurora and Sugar Grove, passed a similar referendum in April’s election, Pubentz said. Fourteen of those are working with NIMEC. North Aurora, he said, ended up negotiating a rate of 5.75 cents per kilowatt-hour, as compared with ComEd’s current 7.76 cents per kilowatt-hour rate.

Both Trustees Andy Kaczmarek and Pete Heinz expressed skepticism about the deal, but both gave their assent to letting the residents decide through referendum.

“It’s pretty rare we get a program with no downside to it, unless I’m missing one,” Pubentz said.


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