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For clean energy advocacy groups, the passage of the electricity aggregation referendum represents an opportunity to push the city to further invest in renewable energy sources. Here, for instance, is a combination solar and wind-powered streetlight on Chicago's West Side.

Let the bidding begin: Chicagoans approve electricity aggregation to cut bills

by Drew kann
Nov 07, 2012

After Tuesday's referendum, the phrase power broker has a whole new meaning for the City of Chicago.

A majority of Chicago's voters approved the electricity aggregation referendum on Tuesday’s ballot, entrusting the city to negotiate with energy suppliers and purchase power on behalf of the city's residents and small businesses.

As of Wednesday morning, with 98 percent of precincts reporting, 476,934 Chicago voters, or 56 percent, had approved the referendum.

In the short term, there is little doubt that aggregation will save approximately one million eligible Chicago residences and small businesses money on their power bills. The Citizen’s Utility Board, a non-profit watchdog group, recently projected that Chicago residents could see savings of around $100 on their power bills in the first five months of 2013.

The Illinois Power Agency Act requires that Chicago’s aggregation program be implemented on an opt-out basis. This means Chicago residents and eligible small businesses will have two options:

- Do nothing, in which case power customers will be automatically included in the aggregation and have their energy supply and rate secured for them by the city.

- Opt out. Chicagoans who choose this option will then have the choice to either remain a ComEd customer or to negotiate directly with an alternative energy supplier on their own.

With the passage of the measure, the City of Chicago will now begin the process of soliciting bids from potential energy suppliers.

In the weeks leading up to the vote, Chicago and local consumer advocacy groups mounted separate campaigns to sell the referendum as relief for power customers.

The simple logic behind aggregation is that there is strength in numbers: by grouping all of Chicago’s residents as a single power consumer, the city should be able to negotiate lower rates for customers.

Others involved in the city’s vocal clean energy movement, have advocated electricity aggregation as a means for the city to further invest in renewable energy.

“Chicagoans voted for an innovative opportunity to get more renewable energy like wind and solar in their power mix and save money on electricity bills,” said Howard Learner, Executive Director of the Environmental Law & Policy Center in a press release Tuesday. “We will work with Mayor Emanuel to make Chicago a leading model for reliability and green energy procurement.”

But for clean energy advocates who promoted aggregation in the hopes that it would spur the city to further invest in renewables, the path to a cleaner energy mix becomes tricky.

“Now that we’ve won and have achieved aggregation, it’s really going to be incumbent on our groups to put the pressure on the mayor to make sure that we get a decent clean power mix to really honor this city,” said Jerry Mead-Lucero, an organizer with the Pilsen Environmental Rights and Reform Organization.

One reason for this is the large amount of energy Chicago’s customers would require. Assuming only a sliver of the nearly one million eligible residents and businesses opt-out of the aggregation, the size of the Chicago customer base would limit the pool of suppliers who could handle a deal that size.

One possible way to work around this limitation is to contract with multiple suppliers to meet the city’s energy demands.

“[Chicago] is the biggest city to aggregate in Illinois so there are a limited number of suppliers that can meet that demand,” said Sarah Wochos, a senior policy advocate at the Environmental Law and Policy Center. “However, they might work together and that would bring different mixes of companies in to provide the power so I think that there is opportunity there.”

In community meetings hosted by the City of Chicago prior to the vote, Mark Pruitt, the former director of the Illinois Power Agency who has been brought in as a consultant by the city, expressed that the city would be open to using multiple suppliers, as long as rates across the city remained the same.

Now that the referendum has been approved, the city will be required by law to host two hearings on the plan of governance for aggregation, detailing how the city will operate as the intermediary between city residents and prospective power suppliers.

Though no official dates have been set for these two hearings, clean energy advocates view these forums as their best chance to ensure that the city invests as much as possible in renewable energy.

“We plan to use those opportunities to tell the city that this is what we want and to bring in the public to tell Rahm Emanuel that, ‘Yes, we want cost savings, but we also want clean energy’,” said Marissa Lieberman-Klein, the chair of the Chicago Clean Power Coalition’s field team.