Municipal Aggregation: An Insider’s View

In addition to the work that I do at CBD, I sit on the Board of Trustees in a suburb of Chicago. Like dozens of other communities in Illinois, my village passed a municipal electric aggregation referendum in March of 2012. I, along with another Trustee and our Village Manager, was tasked with seeing the aggregation process through on behalf of the village.

When determining what was important to me in aggregation, I understood that savings was a given. What mattered to me was getting the most flexibility for residents and making sure that I was making the right—not the wrong—decision. It’s easy to explain to residents that they are going to save a significant amount of money on their electric bills, but the last thing that any elected official wants to deal with is making a decision that creates issues for residents. I wanted to be confident that residents would get good customer service and that they could opt out without financial penalty at any time.

Other things I would have liked to see that may have helped tip the scales in favor of one provider or another, if everything else was on-par:

Help with getting the word out about the referendum, as the village was prevented from taking a side on how to vote when informing residents about the ballot initiative for aggregation. This could include:
- Augmenting regular consumer-focused customer acquisition campaign tactics with a “vote yes on aggregation” message.
- Hosting a coffee reception for residents (not Village Board members) to explain what aggregation is and how it benefits residents, encouraging them to vote to pass the referendum.
- Reaching out to local press to discuss the benefits of municipal aggregation and explain what a “yes” vote on the issue means to residents.

Knowing that a company was willing to act as a partner with the village prior to the referendum would have created some goodwill, not to mention positive visibility, for the provider.

After the referendum vote, bidding REPs could have considered:

Providing concise, yet compelling “why us” narratives to the Village Board. Help the decision-makers understand that there is a qualitative difference between providers.
In the bid package, offer to send out a mailing explaining why the board made a good decision in selecting the provider (if they are selected).
Offering more than one plan for residents to choose from. Ideally, I would have liked to have offered residents a default green plan, but also give them the option of a brown plan to opt into—with both plans priced at an attractive, aggregated rate.

Bottom line: There’s opportunity for REPs competing for municipal aggregation contracts to meaningfully differentiate themselves at a time when it’s very likely that bids will be a tenth of a penny per kWh or less apart.