Illinois is the fastest-growing CCA state in the nation. Called municipal aggregation in the midwest, the legislature passed enabling legislation in 2009.
From 2011-2013, municipal aggregation grew from 20 communities to over 650, representing a whopping 80% of the residential market. This rapid switch was due to three factors: 1) an average customer rate savings of 25%-30% on electricity, 2) successful community outreach and public referenda, and 3) supportive utilities and power suppliers.
Municipal aggregation in the midwest operates in a competitive retail environment, which means that a functional separation already exists between power generation and power delivery. Communities contract for power through licensed ARES (alternative retail energy suppliers) and supply contracts are generally short term (i.e. 1-2 years). As in other CCA states, Illinois’ large utilities – Commonwealth Edison and Ameren – continue to handle power transmission and distribution, grid and line maintenance and customer billing. Because the market is already open, the utilities have expressed no opposition to municipal aggregation; the ARES like it because it cuts down significantly on direct marketing and customer acquisition costs.
Although rate savings have been the primary impetus for CCA formation in Illinois, some of the state’s municipalities are pushing for cleaner and more efficient supply. The City of Oak Park, for example, included a preference for cleaner power in its request for proposals, and it accepted a bid that included 100 percent wind-based renewable energy certificates (RECs). The City of Chicago, now the largest aggregation in the Country, signed a 27-month contract with no coal and no nuclear and included 5% in- state wind power in its portfolio. In addition, Chicago is partnering with its supplier on a new 3MW solar project in the downtown area.
ILLINOIS CCA FAST FACTS (updated October, 2013)
- Year that Illinois passed energy aggregation law: 2009
- 2013 State Renewable Portfolio Standard (RPS): 8%
- Number of aggregated cities and towns as of September 2013: 671
- Number of residential customers that have switched to aggregated service over a period of 18 months: 3 million
- Number of steps for a municipality to establish a CCA in Illinois: 5
(1) Adopt a resolution authorizing local CCA referendum; (2) If passed, adopt an ordinance establishing the CCA program; (3) Develop a plan of governance and approve after two public hearings; (4) Conduct a public bidding process for electricity suppliers; (5) Implement the program, including ample public education and opt-out notifications. - Statutorily required ballot question for local referenda: “Shall the City of ___________ 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 a program?”
- Average /kwh supply rate in 2012-2013 aggregation contracts: 4.45 cents; lowest /kwh supply rate on record in downstate IL: 3.5 cents
- Date when ComEd and Ameren rates are expected to decline: June 2014
