Referendums might open door to cheaper electricity

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Electric journeymen linemen for the city of St. Charles Kevin Buch (left) and Mike Cedergren check out an electrical box in St. Charles Friday March 5, 2010. 3/5/10 | Sun-Times Media~File Photo

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Updated: March 28, 2012 9:49PM

When referendums show up on election ballots, asking voters to say yes or no on some issue, they’re usually seeking permission to collect more taxes.

But when voters go to the polls for the March 20 primary, most cities and villages in northern Kane County will be asking for permission to try to save their people some money.

Residents of Elgin and 13 other area communities be asked to vote on a nearly identical question: “Shall the (municipality) have the authority to arrange for the supply of electricity for its residential and small commercial retail customers who have not opted out of such program?”

Besides Elgin, that issue will be on the ballot in Algonquin, Barrington Hills, Burlington, Campton Hills, Carpentersville, East Dundee, Gilberts, Hampshire, Hoffman Estates, Huntley, Pingree Grove, South Elgin and West Dundee.

To get these referendums onto the ballot, each village board or city council had to vote in November or December whether it wanted to try this new approach to buying electrical power. The state Legislature gave municipalities and counties the right to hold such referendums when it passed the Illinois Power Agency Act.

In each city or village where the voters say yes, municipal officials will negotiate with ComEd’s power-generating sister company and other private companies that generate power, and try to find one that will agree to provide as much power as that town’s houses and small businesses need, at a lower price per kilowatt hour than ComEd’s sister company normally charges.

Residents would still have their power delivered via the existing ComEd wires and ComEd still would collect the monthly electric bill, which would include payments to itself for the chore of distributing the current plus whatever the new provider has agreed to charge for the raw power.

Under the state law, only residential customers and small businesses qualify to be covered by such negotiated sales. Larger businesses, governmental bodies, schools, colleges, etc. would have to continue trying to negotiate the best possible deal on their own. And anybody can “opt out” of such a plan if they prefer to negotiate with power generators on their own, or simply want to keep buying their raw power from ComEd.

Under the state law, each municipality that adopts the new approach must hold a public hearing to explain how the new system would work, allowing residents to make an informed decision about whether they want to go with the new supplier or opt out.

How much?

How much this aggregation process could save power users remains unknown until actual negotiations take place.

Shawn Ajazi, an energy operations manager hired by the village of Burlington, told that Village Board last fall that other negotiators have managed to line up rates about 1 cent per kilowatt hour less than ComEd charges. He said that would save the typical household about $175 per year.

Voters already have approved such aggregation in Crest Hill, Elburn, Fox River Grove, Glenwood, Harvard, New Lenox, North Aurora and Sugar Grove, according to Mary Randle of the Metro West Council of Government.

In Elgin, City Manager Sean Stegall and Mayor Dave Kaptain have said the hoped-for lower power rates could ease the pain residents will feel this year from a new tax on electricity and natural gas bills.

For an average home, Elgin Corporation Counsel Bill Cogley has estimated, the total electricity savings could be $80 a year — more than the $63 a year that city officials estimate the new power and gas taxes would cost each year.

Kaptain argues that while residents have no control over their property tax bill, they do have some control over how much power they use.

Not Sleepy Hollow

The Kane and DeKalb county boards have put similar referendums on the ballot in unincorporated areas of their counties, asking for permission to negotiate for power to areas that aren’t inside any city or village.

The electricity referendum won’t be on the ballot in St. Charles and Geneva, because those cities operate their own electric power systems. They already buy their raw power from competing companies and then distribute it on wires owned by the cities.

The only other municipality in northern Kane County that won’t hold referendum in March is Sleepy Hollow. Sleepy Hollow Village President Steve Pickett said Monday that board members aren’t necessarily opposed to the idea, but they didn’t have time to examine it closely before the deadline for putting a referendum on the ballot.

“We (on the Sleepy Hollow board) talked about it briefly, but we don’t really have the staff to investigate it and follow up,” Pickett said. “There are a couple of other options out there. We may look at the possibility of joining with some other villages in a consortium to negotiate for power purchases together. And if that also would require passage of a referendum, well, there’s always the November election.”

Few other issues

Few other referendums will appear on the March 20 ballot in northern Kane County. In Campton Hills, non-binding questions will ask whether the village should lobby to keep the Wasco post office open and whether the village should consider buying tornado/emergency warning signs. And the Elburn Village Board is asking voters to approve a higher property tax rate.

County Elections Director Mark Mossman said the deadline for city councils, village boards or the County Board to submit a referendum was Jan. 3, and the circuit clerk and local election officials had to certify any other referendum questions by Jan. 12.