Thursday, December 13, 2012

Aldermen approve Emanuel's energy switch to Integrys from ComEd

Chicagoans could find out as soon as Thursday exactly how much they will pay for electricity under a plan approved Wednesday that switches about 1 million people to Integrys Energy Services.

Mayor Rahm Emanuel received unanimous City Council approval Wednesday to negotiate most details of the transaction.

Michael Negron, deputy chief of policy and strategic planning for the Emanuel administration, said Integrys, a sister company to Peoples Gas, is carefully timing its bulk electricity purchase in order to strike a good deal for Chicago. It could happen Thursday.

"Typically in this industry, when you lock down a rate it's for minutes or hours," he said. "We want to be in a position to get us the best possible prices."

The city hopes to be a model for other communities because its contract calls for consumer protections and elimination of power produced by burning coal.

"For protecting our residents and protecting our environment, we have taken, I think, a significant step, and one that's a model that other cities will look at," Emanuel said.

Integrys must deliver prices at or below what residents would have paid Commonwealth Edison through 2015 and cannot charge early termination fees to consumers who decide to seek alternative suppliers or deny service as a result of their credit history. Consumers can also opt out.

Emanuel has said consumers could see savings of about $150 per household through May 2015.

David Kolata, executive director of the Citizens Utility Board, a Chicago-based consumer advocate, applauded the deal, which he said had "consumer protections that are stronger than we've seen in any other community."

ComEd, which will deliver electricity purchased by Integrys, will still be responsible for billing and fixing power outages.

An earlier plan to siphon a portion of consumer savings to invest in rooftop solar panels and energy efficiency upgrades in Chicago buildings didn't get out the door. Some critics said the plan would be akin to a hidden tax.

Mark Pruitt, of the Delta Institute, a consultant to the city on the issue, said Integrys is being encouraged to make investments in energy efficiency improvements as it hedges its Chicago portfolio.

Just as Integrys can purchase megawatts from power plants to increase its electricity supply, it can also fulfill its obligations by purchasing so-called negawatts, which decrease demand for power. For instance, rather than buying power from a natural gas plant, Integrys can pay a large manufacturer to power down at certain times to decrease electricity demand.

"The innovation can still continue as the contract begins," said Jack Darin, executive director of Sierra Club's Illinois chapter and a member of the advisory committee for the electricity deal.

Chicago is the largest city in the country eligible to adopt such a plan under state laws. Only Ohio and Illinois laws allow for such efforts, according to city officials. Hundreds of suburbs have adopted the electricity arrangement in recent years.,0,4748379.story

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