Thousands of customers in the Commonwealth Edison territory in the Chicago, Illinois area are paying electric rates as high as 35% above market prices because of the decision of their local municipal aggregator.

Crain's Chicago Business reports that customers in the municipal aggregation run by the Village of Dolton are paying an electric rate of 9.6 cents per kilowatt-hour, which is 35% higher than ComEd's electric rate.  In contrast, competitive electric suppliers offer rates even below ComEd's rate to customers who shop outside of municipal aggregations.

Dolton finds itself in this position of requiring its residents to pay excessively high electric rates because of what appears to be poor management of its municipal electric aggregation program.  Under municipal aggregation, all of the customers in a city or town are switched to the electric supplier chosen by the municipality, unless the customer affirmatively opts out.  In fact, many customers do not realize that their electric supplier has been switched under the municipal aggregation process.

For whatever reason, when Dolton's fixed rate electric contract expired in January, it chose to elect variable-rate, month-to-month service with its electric supplier.  While there's nothing inherently wrong with variable rates, customers electing variable rates must be proactive in watching the market, to avoid volatility and price spikes.

Dolton, however, has not done this, and has stayed on variable rates since the end of January.  Those variable electric rates are now approaching 10¢ per kWh, even as the same competitive suppliers who serve aggregations are offering shoppers rates at or below 7¢/kWh.

Worse, according to the Crain's article, Dolton does not appear to be in any rush to find a solution to the high electric rates. The village does not expect to put a bid out to find a better electric rate until "mid- to late fall".

It's just an example that cities and towns do not make good electricity buyers.  Cities and towns have no expertise in procuring electricity or natural gas for thousands of customers.

Each customer is different.  Each customer has their own unique needs.  When shopping for themselves, customers can find the best electric rates instead of hoping that they will get a good electric rate through municipal aggregation.


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