New electrical supplier will save Chicago households more than $100 in first 16 months
BY FRANCINE KNOWLES Business Reporter email@example.com December 14, 2012 3:41PM
Updated: January 16, 2013 6:08AM
The average Chicago single family household will save $135 to $165 on their electricity bills or 11 percent over the first 16 months under the terms of an agreement the city has reached with electricity supplier Integrys Energy Services.
The city locked in a rate of $5.42 cents per kilowatt hour until May 2014, Mayor Rahm Emanuel’s administration said Friday.
The current ComEd rate is $8.32 per kilowatt hour.
The Integrys so-called “municipal aggregation” deal will generate roughly $150 million in total savings for Chicago residents in the fist 16 months between February 2013 and May 2014.
During the first four months, Chicagoans will save approximately 21 percent resulting in nearly $20 of savings per month for the average single family household, the city said. The rate for the last 12 months of the contract will be set later, but Integrys is required to always beat or match the ComEd price even if it goes down. ComEd’s higher-than-market-rate electricity contracts signed with Ameren in 2007 will expire June 1, 2013.
Integrys already supplies electricity to 46 communities, including Oak Park, Oak Brook, Lincolnwood, Vernon Hills, Hickory Hills and River Forest.
Last week in choosing Integrys to be the lone supplier of electricity to nearly one million Chicago customers, or 2.7 million residents, the Emanuel administration projected the initial savings would be as high as 25 percent.
Communities in ComEd’s service territory that have agreed to have alternative suppliers furnish their electricity have saved from 25 percent to 50 percent on their electricity rates based on contracts that were negotiated earlier this year when electricity prices were lower, according to Citizens Utility Board spokesman Jim Chilsen.
Integrys’ electricity rates agreed to in other Chicago suburbs this year that were formerly supplied their electricity by ComEd show rates range from a low of $4.551 per kilowatt hour to a high of $5.78 per kilowatt hour, according to information on the Illinois Commerce Commission’s web site. Rates put in place in Chicago area communities in ComEd’s territory supplied their electricity by other alternative suppliers are as low as $4.035 per kilowatt hour in Wilmette and Kenilworth under contracts with supplier MC Squared and as high as $6.23 in Fulton under a contract with FirstEnergy Solutions.
Representatives of Integrys and CUB say it’s not possible to make an apples-to-apples comparison of rates being paid in other municipalities where electricity was purchased earlier this year and the rate Chicago customers will pay. That’s because rates vary based on supply and demand and other market factors at play at the time bulk electricity purchases are made.
ComEd’s rate stood at $6.932 per kilowatt hour from June 2012 through September 2012. The current rate of $8.32 rate is expected to be followed by a significant drop.
The deal with Integrys eliminates coal from the fuel mix used by Integrys, reducing the city’s carbon emissions by at least 10 percent, which represents the equivalent of taking roughly 80,000 cars off the road, the city said.
“With this agreement, we have proven that by buying electricity in bulk cities can not only deliver savings to residents and small businesses, but they can also reduce their carbon footprint,” Mayor Emanuel said in a statement. “As the largest aggregation to date in the United States, Chicago is setting an example for other cities to follow as they look to provide their residents with cheaper and cleaner energy.”
Chilsen gave the agreement high marks, noting, the city “has structured a deal that has the best consumer protections CUB has seen of any ‘municipal aggregation’ community in Illinois. We’re pleased that Chicago’s plan secures initial savings for consumers, but features other safeguards, guaranteeing to meet or beat ComEd’s price over the two-year term and allowing customers to opt out at any time without paying an exit fee. It’s also encouraging that the City of Chicago’s plan incorporates energy efficiency, renewable energy, and demand response to help homes keep a lid on electricity costs.”
Contributing: Fran Spielman