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Oswego residents to pay more on electric bills : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
Oswego residents to pay more on electric bills
Charge for electric power to rise when current contract expires June 30

by John Etheredge

3/27/2014

Oswego residents should expect to pay more for their electricity beginning this summer.

Since July 1, 2012 the village's electric aggregation program has been saving an average village household about $20 per month on their ComEd bills or $240 annually.

However, Mark Horton, the village finance director, told the village board this past week that prices for electric power are on the rise. As a result, based on current prices, he said the average village household should expect to pay about $17 more per month on their electric bills after July 1.

In March 2012 village voters passed an electric aggregation referendum which allowed the village to seek competitive bids for the electric power portion of local residents' and small businesses' monthly ComEd bills.

The village subsequently awarded a two-year contract to First Energy Solutions, Inc. to provide the village with electric power at a cost of 4.75 cents per kilowatt hour. At that time, ComEd's kilowatt per hour rate was 7.73 cents.

First Energy's lower rate has enabled village residents and small businesses to achieve the savings on their electric bills.

But over the past two years, the gap between what ComEd has been charging its customers and the amount that other electric power providers charge has narrowed, according to Horton.

Horton said ComEd is expected to announce a new kilowatt per hour rate in May of about seven cents. That seven cent rate is only slightly higher than current bid prices from other electric power providers.

He said he has seen recent bid prices from other providers of 6.92 cents per kilowatt hour under a one year electric aggregation contract and 6.52 cents per kilowatt hour under a three year contract.

The village is scheduled to seek bids through the Northern Illinois Municipal Electric Cooperative (NIMEC) next Tuesday, April 2.

"Albeit no matter what we're going to do we're going to go from a 4.75 cent rate to no more than a likely six and one-half cent rate (per kilowatt hour)," Horton said, adding, "It's going to be a two cent increase for the residents which does amount to an increase of about $17 (per month) for the average residential property owner going forward."

Referring to the higher rates, Horton said, "There's nothing we can do. We actually got into the aggregation program at the bottom of the market (in 2012). Since that time commodity prices have just been rising and, at this point, they have not been going down."

When questioned by board members, Horton said the village's current contract for electric power from First Energy Solutions will end June 30.

If the board were to decide not to seek competitive bids through NIMEC, Horton said ComEd will automatically become the village's electric power provider effective July 1.

The board, however, agreed to have village staff proceed with the bid process next week.

If the bidding is successful, Horton said the village will-just as it did two years ago-send a letter out to all village households and small businesses notifying them of the new contract and their ability to opt out of the program.

Regardless of what residents decide to do, they will continue to receive their monthly electric bills from ComEd and the utility will continue to maintain local electric transmission lines and other electric service infrastructure. The only difference residents will notice will be a line on their ComEd bills indicating that another firm is providing their electric power.





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