Admin’s Note: The opinions expressed in this article are solely mine based upon my research. Burbank residents should be cautious when choosing an electricity supplier and are advised to conduct their own independent research into individual suppliers before making a purchase decision.
In April 2013, Burbank voters in the consolidated general election considered the following question:
"City of Burbank, Electrical Aggregation": Shall the City of Burbank have the authority to arrange for the supply of electricity for its residential and small commercial retail customers who have not opted out of such program?
The referendum passed with over 64% of the voters choosing yes.
WHAT IS ELECTRICAL AGGREGATION?
The Citizens Utility Board (CUB) is a nonprofit, nonpartisan organization that represents the interests of residential-utility customers of Illinois. CUB’s Guide to Municipal Electricity, in part, states:
Illinois law allows municipalities to purchase electricity on behalf of residential customers living within their borders. While municipalities choosing aggregation would be responsible for negotiating the price of power from a supplier other than the traditional utility, your utility would still be responsible for delivering that power to your home, and billing you for it. In theory, municipal aggregation allows communities to use the collective bargaining power of residents to negotiate for lower power prices from suppliers.
After voters approved the electrical aggregation referendum in April, the City of Burbank began negotiating with electrical suppliers for the purchase of electricity.
HAS BURBANK DECIDED ON AN ELECTRICITY SUPPLIER YET?
Yes. In a letter mailed this week to residents, the City of Burbank announced that it has chosen FirstEnergy Solutions as the aggregate supplier. If you do nothing, FirstEnergy will become your electric energy supplier. NOTE: ComEd will continue to deliver your electricity and you will continue to receive a single monthly electric bill from ComEd.
WHAT RATE HAS THE CITY OF BURBANK NEGOTIATED FOR US?
The City of Burbank has negotiated a rate of 5.46 cents per kilowatt-hour (kWh) through June 2014.
For comparison, ComEd’s price is 5.511¢ per kWh* from June - Sept. 2013 and will fall to 5.473¢ per kWh* from Oct. 2013 - May 2014
*ComEd’s prices according to CUB’s Prices to Compare chart
HOW DOES BURBANK’S NEW RATE OF 5.46¢/KWH STACK UP AGAINST OUR NEIGHBORING COMMUNITIES?
My review of CUB’s most recent data shows that neighboring cities that participate in electrical aggregation pay on average of 4.99 cents per kWh. Of the 14 cities I used in my comparison, only the village of Worth pays more at 5.48 cents per kWh.
However you must keep these rates in perspective. We’re talking about a difference of less than one half cent per kWh on average. For example, a Burbank household with an average usage of 900 kWh/month over a 12-month period would only realize an additional savings of $5.08/year if paying the average rate of our neighboring communities.
HOW DOES THAT RATE STACK UP AGAINST CITIES LIKE BURBANK THAT VOTED FOR ELECTRICAL AGGREGATION IN APRIL 2013?
Using the most current data published by CUB, I found 77 communities other than Burbank that passed aggregation referenda in April 2013 and that have chosen a supplier. On average, those 77 communities pay 4.48 cents per kWh. 70 communities have negotiated rates less than Burbank and only 7 communities have negotiated rates higher than Burbank. That means about 90% of municipalities have negotiated a better rate.
Using our example of a Burbank household with an average usage of 900 kWh/month over a 12-month period, the additional savings realized would be $10.58/year if paying the average rate of those communities like Burbank that passed electrical aggregation referenda in April 2013.
DO I HAVE TO PARTICIPATE IN BURBANK’S AGGREGATION PROGRAM?
You do not have to participate in the program. If you do nothing, you will automatically be enrolled and FirstEnergy Solutions will become your supplier in 30-45 days depending on your meter read date. If you do not wish to participate, you must “opt out” by returning the form you received in the mail by June 17th.
SHOULD I PARTICIPATE IN BURBANK’S AGGREGATION PROGRAM?
I believe most households will benefit from participating in Burbank’s electrical aggregation program. You will realize a slight savings on your electric bill than if you were to continue with ComEd as your supplier. I recommend you do not “opt out.”
CAN I FIND A CHEAPER RATE THAN WHAT BURBANK HAS NEGOTIATED?
Maybe. You may find a cheaper rate in the market place but it will take some time and effort on your part. Only you can decide what’s right for you. Be an educated consumer. A great place to start your research is CUB’s website. There you will find a list of Alternative Electric Supplier Offers that you can use to compare to Burbank’s/FirstEnergy’s rate of 5.46 cents per kWh. A quick glance at the list shows most company’s rates are higher than Burbank’s negotiated rate.
In addition to rates, I recommend you carefully research the terms of the contract. Read the Residential Uniform Disclosure Statement each supplier is required to provide. Check to see if the quoted rate is fixed or variable. If fixed, for how long; 6 months, 12 months, 24 months? Inquire about cancellation fees, many companies charge an early termination fee that may be as high as $100 or more. The bottom line, as in all contracts, make sure you understand it before you sign it! Also, be aware that contract rates and terms may change substantially after the initial period.
I’VE RECENTLY RECEIVED PHONE CALLS AND HAVE HAD DOOR-TO-DOOR SALES PEOPLE APPROACH ME ABOUT SWITCHING. IS THAT A BETTER DEAL?
Probably not. In my recent experience, not a single energy company that solicited me had a better rate than the City of Burbank’s negotiated rate of 5.46¢/kWh. My advice is to ask for a copy of the contract in writing. Do not make a decision on the spot. Carefully read the contract at your convenience and use the internet to research the company.
The sales people typically don’t make money unless they get you to sign a contract. They can be quite aggressive and some may be downright misleading. Plain and simple, they are selling a product and hope to profit. Generally, they do not have your best interest at heart! If you're not interested, politely ask them to leave. If they continue to persist, call the police.
(View video: Alternative Electricity Suppliers: Top 5 Red Flags below)
I am happy the voters opted for electrical aggregation last April and applaud the City of Burbank for pursuing such a course. I will be participating in the City’s aggregation plan and expect to see a small savings on my monthly electric bill. I believe the negotiated rate of 5.46 cents per kWh is a bit high when compared to other municipalities that participate in electrical aggregation. I hope future negotiations yield a rate more in line with those of the surrounding communities.