What is government aggregation and why is it called “government” aggregation?
Government Aggregation is a process whereby a municipality (city, village, or incorporated town) or county acts on behalf of all or a part of its constituents in procuring their electric supply, either directly or via a third party supplier. Illinois law allows municipalities and counties to arrange for the purchase of electricity supply on behalf of residential and small business customers of investor-owned electric utilities. Authorities of a municipality or county board may “aggregate” residential and small commercial retail electric loads located within the municipality or the unincorporated areas of the county. They may solicit bids and enter into service agreements to facilitate purchase of electricity for their constituents.
There can be and are other forms of aggregation, such as when a chamber of commerce elects to aggregate power supply for its members. Other forms of aggregation may develop in the future with organizations like schools, credit unions, or even service clubs. Public Act 097-0338 specifically applies to a municipality or county government that chooses to aggregate electric supply.
What are the advantages of government aggregation?
Through aggregation, municipalities and counties may be able to help residents and small businesses reduce energy supply costs. By aggregating large customer groups and arranging to purchase supply from the wholesale power markets, an aggregator may be able to offer lower power supply pricing than other alternatives for residential or small business customers. The Retail Electric Supplier may also be able to offer better pricing because of lower customer acquisition costs, such as marketing and account management.
Are there different types of government aggregation?
Yes, basically there are two ways a municipality or county government may aggregate. One is called the “opt-in” method, and the other is known as the “opt-out” method.
With the opt-in program, the governing body passes an ordinance and participants must “opt-in” to be a part of the aggregation.
The second and more popular method is known as “opt-out”. With an opt-out program, a referendum must be passed by the voters. If it passes, residents and small business, to the extent they are taking utility supplied fixed priced service, will automatically be included in the aggregation program unless they “opt-out”.
Does a resident have to participate in government aggregation plan?
No. If the municipality or county moves forward with an aggregation program, but a resident does not want to participate, that resident may opt-out of the program individually. In that case, the customer’s account will remain on their current supply choice whether that is Ameren Illinois Basic Generation Services (BGS), Ameren Illinois Power Smart Pricing (PSP) or RES supply.
Remember, if you don't want another electric supplier and choose to do nothing, Ameren Illinois will continue to purchase power for customers who do not choose another provider. Our price for electricity is obtained independently by the Illinois Power Agency.
Why is a referendum required, and if it fails can the municipality or county still pursue aggregation?
State law requires that the municipal or county government seeking to operate the aggregation program as an "opt-out" program shall hold a referendum where voters decide whether or not the aggregation program shall operate as an "opt-out" program for residential and small commercial retail customers.
Yes, the municipality or county could pass an ordinance to allow for aggregation. However, in that case, the customers would be required to opt-in to be included in the aggregation offer.
If the referendum is passed, are residents and businesses required to be included in the aggregation?
No, customers are given two opportunities to "opt-out";
They may "opt-out" when they are notified by the municipality or the county that they will receive electricity in the near future from a new supplier, and the rate they will be charged for the power.
They may "opt-out" when Ameren Illinois notifies customers, via "switching letter", that the supplier of electricity has changed. Generally the customer would have 10 days to cancel the supplier's enrollment, which would "opt-out" the customer from the aggregation program.
A simplified sample view of how the opt-out aggregation process works.
Step 1 Municipality or County may select a consultant to help them with the aggregation process.
Step 2 County Board/City Council approves referendum to be placed on ballot (typically coincides with other elections such as a primary, general or municipal election).
Step 3 County Board/City Council or their selected Consultant/RES informs the community of the referendum and the purpose of the referendum (i.e. generally to lower electric supply costs).
Step 4 Residents vote on referendum.
Step 5 If the referendum is approved, a review committee is established. A list of potential residential and small business customers is provided from the utility. An Aggregation Plan of Operation and Governance is published by the Aggregator and two public hearings are held. Request for Proposal (RFP) documents are approved and the RFP bid process for energy supply begins.
Step 6 Customers will be sent a notification from the Aggregator to inform the customer of the savings offer, and will also give them an opportunity to opt-out. Those accounts that have not opted out will be enrolled by the Aggregator's RES and identified in Ameren Illinois’ system as having a new electric supplier; however Ameren Illinois will also send a letter to confirm the customer has chosen to switch suppliers.
If a customer resides in a county and municipality that are both seeking aggregation, can they choose whose aggregation program they be placed with?
In this case there are really two aggregation programs being sought. One by the county that would be for all eligible customers in the unincorporated areas and a second aggregation program for incorporated municipal eligible customers. The customer would only be eligible to participate in the aggregation program based on if they reside in or out of the incorporated municipality.
If new to an aggregated area, at what point do customers need to make a decision?
New customers will not automatically be enrolled in the aggregator's programs. Aggregators can periodically ask for new listings of accounts. The Aggregator or their agent/RES will then be able to communicate with these new customers by explaining the program and giving them the option to opt-out.
If a co-op customer is a constituent in an area placing aggregation on the ballot, is that person able to vote?
It will be up to the county or municipality to work with the election commission on how the question will be presented on the ballot and who will be eligible to vote on that question.
How will aggregation impact low-income customers who receive funding / assistance to pay their energy bills?
It may provide them with an opportunity to lower their supply bills.
Today, a customer receiving Low Income Heating Energy Assistance Program (LIHEAP) under the traditional direct vendor benefits has a credit placed on their Ameren Illinois utility bill.
Those under the Percent of Income Payment Plan (PIPP) receive a monthly credit on their utility bill. Under aggregation the bill method elected by the Aggregator and their RES might change the benefits.
If the bill method is Utility Consolidated Bill with Purchase of Receivable (UCB/POR), there is no change to the PIPP customer.
If the bill method is dual or single bill option, the customer Local Administrative Agency for LIHEAP is notified by Ameren Illinois at the time of the switch and the customer is contacted to determine what the customer desires.
If we go with another supplier, what happens if the power goes out? Who do customers call?
No matter who supplies the electricity, you can count on Ameren Illinois to deliver it. As your energy delivery company, we will continue to respond around-the-clock to outages, service calls and emergencies. We are committed to providing the same high-quality service to all customers, regardless of their choice for electric supply.
What if I have further questions pertaining to government aggregation?