The village is mulling the idea of electrical “aggregation” as a way to save residents and small businesses money by acting as the public’s purchasing agent and buying electricity in bulk.

With electrical aggregation, the village, through a consultant, would represent a group of its residents and, through a bid process, try to find an electrical supplier that would offer a favorable rate.

The consultant would compare ComEd’s annual fixed rates with bids that other suppliers submit, according to David Hoover, executive director of Northern Illinois Municipal Electric Collaborative. NIMEC is a company that handles the bidding of power suppliers competing to sell electricity in bulk to municipalities.

“Currently, the residents of Forest Park have only one choice for the provider of power and that’s ComEd,” said Hoover, in a phone conversation. “What we’re doing is giving the village board an opportunity to get more than one price for power for its residents.”

In order for that to happen, the village would need to take several steps and the public would ultimately decide electrical aggregation’s fate.

With the assistance of its lawyers, the village would draft an ordinance calling for a referendum to appear on a future ballot – in this case, the next election is the March 2012 primary.

Passing the ordinance would need to happen before the end of the year to appear on the March 2012 ballot; and then a majority of voters would have to vote in favor. 

If the referendum passes, two public hearings would be held – mostly to educate residents about the program, said Mayor Anthony Calderone. 

Voters in neighboring Oak Park passed such a referendum last April and officials there have begun purchasing power through electrical aggregation. Roughly 20 towns, statewide, approved electrical aggregation when it appeared as a ballot question.

Electrical aggregation was introduced to the state in 2007, following the passage of the Illinois Power Agency Act, which allows municipalities and counties to purchase electricity in bulk for its residents and small business owners. 

Currently, it is not known if the village plans to move forward with a referendum, but at the council’s Oct. 11 meeting, no board member raised concerns about electrical aggregation following a presentation Hoover gave on the topic.

“This is a great opportunity for all residents. … There is no downside,” said Calderone, during the meeting.

Right now, the village is pushing the potential cost-savings that could result if it were to adopt this practice.

If the village were to start purchasing power for its residents, it could get electricity at cheaper rates than consumers pay on an individual basis.

To explain this, the mayor included in the most recent council packet an article on electrical aggregation that appeared in the October 2011 issue of Illinois Municipal Review.

With electrical aggregation, “suppliers compete harder for a large group of customers available through a single solicitation (such as municipal aggregation) than when approaching customers one-by-one,” the article reads.

It goes on to address the purchasing power of an “opt-out” group that would be formed if electrical aggregation were implemented.

“Because of economies of scale, load aggregation increases the buying power of participating consumers. … The competitive pressure created by this increased buying power drives prices lower.”

With the “opt-out” group, anyone in Forest Park who receives an electricity bill is automatically represented by the village when it solicits bids from power suppliers. Anyone who does not want to be part of the group can, as the name suggests, “opt out” and find his or her own energy supplier. 

According to Hoover, the Illinois towns that are using electrical aggregation are saving their residents considerable amounts of money. On average, residents are saving between 25 and 30 percent on electricity rates, said Hoover, during his presentation. 

Environmental benefits are another aspect of the practice that is sometimes touted. Theoretically, a municipality can set environmental parameters that it wants power companies to abide by.

At this point, though, the village has not discussed pursuing any green initiatives.

“I would say most likely because this is early on, we’ve not been [informed] what those environmental savings might be,” Calderone said. “But certainly if [electrical aggregation] was to move forward, we would be prepared when the time is appropriate.” 

For now, the village appears to have its eye on the cost savings aspect. Electrical aggregation is something the village could begin pursuing in the coming months.

To Calderone, at least, it makes “logical sense.”