Issue would go before voters March 20
By Ted Schnell • BocaJump | Dec. 6, 2011
A proposal to seek a cheaper electric supply for Elgin residents and small businesses has been touted by the city as a step that would more than offset residents’ out-of-pocket costs associated with two new taxes to help balance the city’s budget.
No doubt community leaders will try to leverage that into voter support on March 20, which is the city’s next election. The Elgin City Council will be asked Wednesday to place a referendum on the ballot for that election, asking residents to decide whether Elgin should pursue an electric aggregation plan to cut electrical costs for residents and small businesses.
It’s a move being considered by many communities under a recent change in Illinois law that allows communities, even groups of communities, the authority to negotiate to purchase electricity for what amounts to less expensive bulk rates for residents and small businesses. That alone makes it potentially popular.
But as the City Council approaches the conclusion of an arduous budget process that saw a mix of spending cuts and new fees and revenues to plug a gap of as much as $13 million, the electric aggregation plan will give Elgin residents an opportunity to ease the pain. They can choose, by referendum, to try to minimize the effect of two new taxes — one on electricity, the other on natural gas.
The new taxes — on natural gas and electricity — are expected to cost residents an average of $29.48 and $33.53, respectively, per year, according to the city administration. The electric aggregation plan, city officials say, could cut electrical supply costs to Elgin residents and small businesses by 20 percent.
Elgin Corporation Counsel Bill Cogley told the Elgin City Council last week if the electric aggregation plan advances as expected, Elgin residents actually would see a net savings of $17 a year, even with the additional tax on the two utilities.
If voters approve the plan, the city’s agent would seek an alternative supplier who could provide Elgin with electrical power at rates that are significantly less than those of ComEd. Billing, however, would continue to be done by ComEd, which would continue to charge residents for delivery of the power. ComEd’s fees to residents comprise both a charge for the electricity they use and for the delivery of that electricity. The utility would reimburse whatever supplier the city would choose.
In conjunction with the referendum proposal to place the matter on the March 20 ballot, the City Council will be asked to hire BlueStar Energy Solutions LLC, which would promote the proposal to Elgin voters as well as formulate the aggregation plan, Assistant City Manager Rick Kozal said Monday.
BlueStar Energy Solutions LLC would not charge the city for its services, Kozal added.
“In no instance will the city ever be charged,” Kozal said. “If the referendum does not go through, we don’t pay the consultant.”
But if the referendum does pass, Kozal said BlueStar becomes the city’s agent in negotiating a new rate, and the company takes its expenses from the new electrical supplier.
