Elgin goes green in electricity aggregation

The city of Elgin will continue offering municipal electricity aggregation to residents and business owners, and this time city council members opted to go green.

The one-year contract, which council members approved by a narrow majority this week, is with Dynegy Energy Services, which will supply electricity at the rate of 6.798 cents per kilowatt hour starting in January. That's about 3 percent less than ComEd's rate, yielding a $22 average yearly savings, Assistant City Manager Rick Kozal said.

Although ComEd hasn't yet published its rates beyond May, those savings are expected to remain level, consultant Mark Pruitt said.

Mayor David Kaptain and council members John Steffen, Carol Rauschenberger, Tish Powell and Rich Dunne voted in favor of the 100 percent renewable energy contract with Dynegy.

The city received bids from several electricity suppliers, among which Dynegy had the least expensive green option. The cheapest option overall was a "brown" option - or lacking renewable energy credits - from the city's current supplier, Constellation Energy, at a savings of nearly 7 percent compared to ComEd's current rates, according to data provided by the city.

Elgin's choice sends the message the city supports renewable energy, Rauschenberger said. Councilmember Toby Shaw disagreed. "We are not helping push the green needle," he said.

Electric power generated by different producers - including coal, nuclear, wind, solar and more - goes into the electric grid as one, Pruitt said, which means municipalities like Elgin can't purchase energy directly from specific sources. However, renewable energy contracts allow municipalities to support green energy, as each kilowatt hour of energy used corresponds to a credit issued to renewable energy producers, Pruitt said.

This is Elgin's third municipal electricity aggregation contract since March 2012. The first contract yielded 37 percent annual savings compared to ComEd's rates, which have become more competitive.

About 20 to 25 percent of communities in Illinois, including Chicago, that were doing electricity aggregation have stopped, mostly after finding the best deal for them is to go back to ComEd or Ameren, Pruitt said.

Municipalities like Elgin still can benefit from aggregation because of their energy consumption patterns - such as whether more energy is used in summer, when prices are higher - and timing regarding energy market prices, Pruitt said.

Residents can opt out of the program and choose their own electricity supplier.