Deadline Approaching to Adopt Ordinance for a Referendum on Electric Aggregation

Deadline Approaching to Adopt Ordinance for a Referendum on Electric Aggregation

  Monday, November 28, 2011    Julie Tappendorf

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In order to place a referendum question on the issue of electric aggregation on the March 20, 2012 ballot, a municipality must pass an ordinance initiating the question on or before January 3, 2012.  For those municipalities that plan to cancel their second meeting in December, an ordinance should be placed on the agenda for action at their first meeting in December in order to meet the January 3, 2012 deadline. 

Last month, I reported on the Illinois statute that authorizes municipalities to enter into contracts with electricity suppliers on behalf of residents and small commercial retail customers within their jurisdiction.  The contracts provide for the bulk purchase of electricity from a supplier and then the sale of that electricity at fixed rates in municipalities. By aggregating the buying power of a large number of small customers, a municipality should be able to obtain a better rate for its residents than if residents shop for electricity on an individual basis. 

There are two ways to initiate the process.  The second type, the most popular option, is an "opt-out" program that automatically includes each residential unit and certain small commercial retail customers in the pool unless the customer affirmatively decides not to participate.  If the residents approve the referendum, the municipality must then develop a plan of operation and governance for the aggregation program and hold at least two public hearings on the plan.  An RFP must also be prepared and issued for companies to submit proposals to provide electric services to the municipality. Thereafter, the Illinois Power Agency Act mandates that the aggregated electricity supplier must notify customers of the rates, conditions of enrollment, and the option and method for customers to "opt-out" of the aggregation program.

UPDATE 2/6/2012:  The deadline for placing a referendum question on electric aggregation on the March 20th primary ballot has passed.  A number of Illinois municipalities met the deadline, so quite a few people will be voting on this issue in March.   For municipalities who have not yet put the electric aggregation referendum on the ballot, there is still plenty of time to have the question put on the ballot for the general election in November.