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Electrical aggregation will save the average Wilmette household $450 in the plan's first year, according to the grassroots group Go Green Wilmette. Residents can opt for green energy from renewable sources for only $9 of those savings.


Wilmette power deal cuts electric rates in half for residents

by Carly Helfand
July 19, 2012


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Carly Helfand/MEDILL

New electricty rates through power aggregator MC Squared will cut rates in half through May before being renegotiated.

Wilmette residents and small business owners have just a few days remaining to opt out of a new village-wide energy deal.

But it’s hard to imagine many will walk away from an aggregation contract promising to cut power rates by more than 50 percent for the first year.

Under the new contract, MC Squared will arrange for the purchase of electricity that will be added to the grid on behalf of Wilmette power-users, but Commonwealth Edison Co. will still be handling power distribution and billing. The only noticeable change for customers will be the price tag for their power.

“Electricity is dumped onto the grid and used on an as-needed basis,” said John Prejzner, assistant to the Wilmette village manager. “If you stay with ComEd as a traditional ComEd customer, you’re still using the same electricity, you’re just paying a different rate for it.

“We’ve used the example of a river,” Prejzner continued. “When you dump a bucket of water upstream and downstream you take a bucket, you can’t say that’s the same bucket of water. It all gets mixed together, and you can’t tie it to the source.”

 

Mark Pruitt, program director for the Illinois Community Choice Aggregation Network (ICCAN), which handled the contract between Wilmette and MC Squared, said the actual operation of the grid and its balance of power is a responsibility of PJM, the regional transmission organization that acts as an “air traffic controller” between Illinois and Maryland.

The rate of 4.035 cents per kilowatt-hour will apply through May 31 of next year. Then, a new rate will be negotiated based on the current market value of electricity. Prejzner said the program will only continue as long as it provides savings for Wilmette residents.

According to local grassroots group Go Green Wilmette, the aggregation plan through MC Squared will save the average household $450 in the first year.

While all providers are required to include at least 7 percent renewables in their energy plans, for a small additional charge of less than a dollar a month, environmentally conscious residents can help further offset their carbon footprints with a renewable energy credits (RECs) plan.

MC Squared will purchase RECs, with each equal to 1,000 kilowatts, to match the average consumption of each user who adopts the plan. Money from the sale of RECs goes indirectly toward the support of renewable energy generators.

Trudy Gibbs, a board member for Go Green Wilmette, said that communities offering similar green power programs “only get about 3 percent of the population to sign up for it because it’s complicated.”
“It’s one more step,” she said. “You have to say, ‘I’ll be part of the aggregate, but I also want green power.’”

According to Go Green Wilmette, Wilmette’s Individual Choice 100 Percent Green Power Program would still save the average household $441 over the current ComEd bills while eliminating about 9,270 pounds of coal and 13,835 pounds of carbon dioxide from the energy mix. Residents are free to switch to the green option at any time by visiting www.lakeshorepoweralliance.com.

Go Green Wilmette, with a mailing list nearly 1,200-strong since forming in 2006, has been working to increase awareness of the choices available to residents, and Gibbs said so far the response has been positive.

“When the residents saw that the difference between going 7 percent [green] and 100 percent was just $9 a year, they said, ‘We’re passing up a big opportunity. We’re a community that can really do this. We don’t produce any power – we’re just polluting someone else’s backyard, and that’s not who we are.’”

Wilmette voters first authorized the village to solicit proposals for cheaper energy plans in March. By pooling its accounts, Wilmette was able to create bidding interest from seven suppliers. The result was a contract from the chosen provider, MC Squared, that allowed Wilmette to lock in prices at an established rate until next May, when they will be reassessed.

“The transactions we’re talking about for municipal aggregation are really around establishing price hedges and pricing guarantees,” Pruitt said. “Electricity prices change every five minutes. It’s very volatile. Consumers are trading variable electricity costs with fixed costs.”

In addition to pricing, Pruitt and the ICCAN considered timeliness of submission, qualifications and licensing, responsiveness and corporate credit as selection criteria when they made their recommendation to the village. The supplier’s energy sources were not considered.

Gibbs said that Wilmette negotiated the green power option with MC Squared as a result of grassroots lobbying.

Still, there is no guarantee that renewable energy sources will actually be powering the village even under the new plan. A common misconception, Gibbs said, is that people think the energy coming to their individual houses will be green if they opt for the eco-friendly plan.

“That’s not the case,” she said. “It’s going to go onto this grid that [provides] the power we all draw from. Somewhere, that green energy is going to go onto the grid on our behalf.

“Right now, we don’t know where our power is coming from,” she continued. “The power is coming from ComEd – it could be produced in Southern Illinois, it could be produced in Ohio, all sorts of different places. Same with the renewable energy – we don’t know where that is, but it’s coming into the grid that feeds to all of us.”

But John Kelly, executive director of the Galvin Electricity Initiative, which founded ICCAN, said that information is available to those who seek it out. Generators are subject to an extensive reporting system so that their emissions and output can be measured by energy associations. Because contracts are required before generators can put their power onto the grid, it’s possible for cities to stipulate that their energy come from particular sources.

But Pruitt said that while it might be possible to identify in general where the source electricity is coming from under a contract, most communities “haven’t gone that route just yet.”

“You’d be stepping from that purely financial point of view and starting to dabble in the physical markets – where the power is produced – and that’s a definite possibility,” he said. “I could definitely see the market moving in that direction.”