Community Choice is called Municipal Electricity Aggregation (MEA) in Illinois. MEA became wildly popular from 2011 to 2013 because it offered very significant savings to customers. But when savings largely disappeared in 2014-15 many MEAs ceased operations. Nevertheless, Illinois still has hundreds of MEAs and a strong base of political support.
Municipal aggregation in the Midwest operates in a competitive retail environment. A functional separation between power generation and power delivery has existed since the 1990s. Municipalities or individual customers are able to sign contracts to buy power from licensed Alternative Retail Energy Suppliers (ARES). However, before the introduction of MEA, few residential customers took the trouble to switch to electricity from alternative suppliers.
As in other Community Choice states, Illinois’ large utilities – ComEd and Ameren Illinois – continue to handle power transmission and distribution, line maintenance and customer billing. Because the retail market was already open, the utilities expressed no opposition to the introduction of municipal aggregation. ARES companies supported the introduction and growth of MEA because it reduced their customer acquisition costs.
In 2012-13 Illinois was the fastest growing community choice market in the nation. The growth was caused by MEAs initially having a pricing advantage of as much as 3 cents/kWh over the incumbent power suppliers. MEAs offered rates of about 5 cents/kWh at a time when ComEd was charging about 8 cents/kWh.
Capping this period of heady growth, Chicago voters approved a referendum in November, 2012 to launch an MEA, making it by far the largest US city to embrace community choice. More than 70% of residential and small commercial customers in ComEd’s service region were enrolled in MEA in late 2013.
By the middle of 2014 more than 720 Illinois communities had formed MEAs; however, in the second half of 2014 the price advantage that MEAs had enjoyed began to erode and, in some cases, became a price disadvantage. The two large investor-owned utilities were able to obtain cheaper electricity supplies and lower their rates. Consequently, approximately 100 MEAs (including Chicago in 2015) returned their customers to bundled service provided by Ameren Illinois and ComEd. (Doing this did not terminate the existence of an MEA. It essentially suspended the MEA so that it could be restarted if conditions changed, and no new referendum would be required to do so.)
By 2016 many MEA programs were once again able to sign contracts with suppliers that offered a slight price advantage (up to 1 cent/kWh) over utility prices to their customers. This stemmed the decline in the number of MEAs, but whether it will lead to a renewed expansion into new communities is an open question.
As of June, 2019, the Plug In Illinois list of communities pursuing an opt-out Municipal Aggregation Program indicates that out of 645 listed communities, 522 are listed as “Supplier chosen” with contract end dates ranging from September 2019 through July 2022, 23 are listed as “Referendum Passed”, and 100 with expired programs that have not been updated.
CURRENT AND EMERGING ISSUES
Although rate savings have always been the primary impetus for MEA formation in Illinois, some municipalities have prioritized purchasing electricity generated by renewable resources, particularly wind energy. Other cities – perhaps as many of half of Illinois’ MEAs — purchase energy from coal, nuclear and combined cycle gas plants, but offset the associated greenhouse gas emissions by purchasing unbundled renewable energy certificates (RECs). A recent poll conducted in April, 2019 shows that a super-majority of Illinois residents want to be able to choose their energy supplier, choose clean energy, and want more renewable energy in the Illinois power system.
n October, 2021, Highland Park, Glencoe, Lake Forest, Lake Bluff, Skokie, Northbrook and Deerfield re-launched the "North Shore Electricity Aggregation Consortium" which is believed to be the state’s largest “price match.” program. The municipalities will purchase electricity through a bulk contract with MC Squared, leading to a projected $1.6 million in cost savings over three years via a rebate from the energy supplier sent to the communities. Most communities in the consortium plan to use the rebates to fund sustainable projects at no cost to their respective communities.
As of early April, 2022, retail prices have doubled and a number of CCAs are beginning to see a large gap between their pricing and the default pricing, forcing some to let their contracts expire and send customers back to the IOU. The hope is that the pricing issue will resolve in the coming months and year, however there is concern it could lead to political trouble and closure of many CCAs in Illinois. The recent price spikes can catch CCAs off guard if they are not hedged.
Some communities in the state with MEAs have been able to lock in favorable rates for two to three years prior to the rate increase announcement. For example, the city of Bloomington's MEA program was able to lock in a rate of $0.07895 for three years, while Ameren Illinois' summer rate for June through September 2022 is $0.0946, and fall rate for October 2022 to May 2023 is $0.11502. Total savings over 12 months will be $351.16 for residents over the Ameren default rate.
PROCESS TO START AN MEA
Under Illinois law, communities must use this process to establish an “opt-out” MEA. (1) Adopt a resolution authorizing a local MEA referendum. (2) Hold the referendum. (3) If the referendum passes, adopt an ordinance establishing the MEA program. (4) Develop a plan of governance and hold two public hearings before adopting it. (5) Conduct a public bidding process for electricity suppliers. (6) Implement the program, including ample public education and opt-out notifications.
If a community wishes to establish an MEA on an “opt-in” basis (this is not common) it can do so by simply adopting an ordinance. No referendum is required.
Illinois’ Renewable Portfolio Standard (RPS) calls for 25% of electricity generated in the 2025-26 “energy year” to come from renewable sources. The Illinois Power Agency (IPS), the state agency responsible for managing the Illinois RPS, reports in early 2021 that the RPS will deliver only 2.5% renewable energy content in the 2020-21 compliance year. Further, the IPS projects that the Illinois RPS will top out at 8.3% through 2031-32 , achieving only about one-third of its goal. 2021 Illinois Renewable Energy Investment Act SB 316 and HB 1747 would allow consumers, corporations and communities, along with the alternative retail energy suppliers that serve them, to direct their RPS fees toward PPAs for renewable energy resources.
Illinois has more political jurisdictions participating in aggregation programs than all other states combined.
According to the US Environmental Protection Agency, 44 of the top 100 Green Power Partnership communities are in Illinois
LEGISLATION (PARTIAL LIST)
Electric Service Customer Choice and Rate Relief Law of 1997 This law significantly restructured the Illinois electric industry and provided a transition to competitive retail markets. It allowed alternative retail electric suppliers (ARES) to compete against each other and the utility to service customers. Customer choice was phased-in starting in October, 1999 for commercial and industrial customers and in May, 2002 for residential customers. The Illinois Commerce Commission was charged to promote the development of an effectively competitive electricity market.
Retail Electric Competition Act of 2006 laid the groundwork for a competitive retail electricity market for residential and small commercial customers.
SB 1299 (2007) created Public Act 95-0700 which required ComEd and Ameren to offer consolidate billing to MEAs and removed certain other operational barriers related to billing and receivables.
HB 0722 (2009) created Public Act 96-0176 which amended the Illinois Power Agency Act to provide for aggregation of electrical load by municipalities and counties beginning on January 1, 2010.
SB 1396 (2011) created Public Act 097-0222 to set up a consumer information program to support residents in the process of deciding if they want to participate in aggregation programs.
HB 3182 (2011) created Public Act 097-0338 which amended Public Act 96-0176 to add a requirement that the account numbers be provided by the utility to the municipal aggregator, along with the customers’ names and addresses.
HB 5101 (2018), would limit electricity customer choice to using municipal aggregation programs to obtain power from alternative retail electric suppliers (ARES), eliminating the ability of individual customers to sign contracts with ARES. The text of the bill indicates concerns with potentially having previous utility investments undercut as well as the insufficient consumer protections resulting from sales by telephone and door to door means.
Chicago’s Plan for 100 Percent Clean Municipal Electricity. nrdc.org, August 29, 2022
Kane County Receives National Award for Use of Green Power. Kane County Connects, July 14, 2022
Central Illinois energy rates to double, stick around for a year. hoiabc.com, June 6, 2022
Think your Ameren energy bill was high last winter? Just wait for this summer. Peoria Journal Star, April 27, 2022
Electrical Aggregation Rates for Bloomington are Locked In. cities929.com, April 27, 2022
Good Energy Locks in Low Rates for Illinois Residents Despite Recent Ameren Illinois Price Hike. PR Newswire, November 22, 2021
What’s in it for you? Illinois’ sweeping new clean energy law includes a $4,000 rebate on an electric car, up to 10% off on your electric bill and up to $9,000 back on a solar roof. October 6, 2021, Chicago Tribune
River Forest adds solar option for residents. September 19, 2021, Wednesday Journal.
North Shore towns join electrical aggregation program projected to save $1.6 million over 3 years. August 9, 2021, Chicago Tribune
Orland Park Continues Green Electric Aggregation Program. July 12, 2021, patch.com
Kane County Moves to Green Electrical Aggregation Program-At Zero Added Cost. June 15, 2021, Kanecountyconnects.com
City of Evanston Launches Community Solar Program. May 17, 2021, Evanston Round Table
Flossmoor Officials Renew Green Electric Aggregation Program. May 6, 2021, Patch
What Seeking An Alternative To ComEd Could Really Mean For Chicago. May 1, 2021, WBEZ
Galesburg Council Approves New Energy Aggregation Agreement. April 25, 2021, WGIL
Evanston enters 30-month partnership with Chicago firm for electricity aggregation program. April 8, 2021, The Daily Northwestern
The Great Give-Back: Green River Wind Farm Makes First Annual Donation to Local Community Fund. April 6, 2021, prnewswire.com
Chicago Heights To Go Green In Electric Aggregation Program. March 30, 2021, Patch
By 2050, Illinois would use only renewable energy under bill. February 9, 2021. APnews.com
Official List of Municipal Aggregation Communities (A lengthy list of communities that have a municipal aggregation program, had one in the past, or plan to start one.)
Illinois Community Choice Aggregation Network (ICCAN) (A municipal aggregation consulting firm)
Eligo Energy (retail energy supplier)
Homefield Energy (retail energy supplier)
MC Squared (retail energy supplier)
Illinois Power Agency (The state’s power planning and procurement agency)
National Grid Renewables (develops, constructs, owns, and operates competitive renewable energy projects)
Democratize ComEd (coalition to launch municipal aggregation in Chicago)
Municipal Utility Feasibility Study for the City of Chicago (January, 2021, REACH Lab)
OTHER HELPFUL LINKS
CCA-Enabling Legislation: House Bill 362
INVESTOR OWNED UTILITIES
Exelon Corp (Commonwealth Edison)
Page last updated 11.2.22