Opt-Out Rules Make Chicago’s Energy Aggregation Program A Huge Success

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Over the past six months, the largest municipal aggregation program in the United States has saved almost one million customers in the Windy City have about $21 million on their monthly electric utility bills.

But the story gets better.

Using its bulk buying power, Chicago’s municipal aggregation program has not only reduced electricity bills, but it has also reduced carbon emissions by 16%, according to a study by the Perfect Power Institute at the Illinois Institute of Technology..

Municipal aggregation leverages the power of group purchasing to negotiate lower prices on electricity bills for the members of the group.

Chicago voters approved the municipal aggregation program, which allows the city to negotiate cheaper energy rates on citizens’ behalf, in November 2012. Less than a month later, the city selected Integrys Energy Services from a field of eight applicants as the program’s primary energy supplier on the basis of lowest price margin.

“Through the success of the municipal aggregation program, the City of Chicago has decreased its carbon footprint while delivering savings to residents and small businesses,” said Chicago’s Mayor Rahm Emanuel, in a press release. “By supporting Illinois wind farms and eliminating coal from the city’s portfolio, Chicagoans will build a cleaner, healthier environment for our children.”

The key to Chicago’s success: opt-out rules.

Under opt-out aggregation programs, the municipality chooses an electric supplier, and those residents and businesses that have not already chosen a supplier are assigned to this supplier unless they affirmatively choose not to be.

View this News Release (external link)

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