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Chicago Suburb Compels FirstEnergy to Slash Base Rate

March 31, 2016 By Cheryl Kaften

In a ratepayer revolt, a suburb of Chicago has compelled FirstEnergy Solutions to slash its electricity price in order to retain its local customers.

The Oak Forest City Council on March 22 voted 7-0 (Agreement No. 2016-03-0224A) to amend its aggregation agreement with the energy supplier, according to a report in the Chicago Tribune – reducing the rate FirstEnergy Solutions charges from 6.92 cents per kilowatt hour (kWh) to 6.5 cents/kWh.

Mayor Henry Kuspa told the newspaper that City Administrator Troy Ishler deserves praise for including an out-clause in the three-year contract that the city signed in 2014 – enabling Oak Forest customers to transfer back to Commonwealth Edison (Com Ed) if its rates for electric power were lower.

And that’s exactly what came to pass: Com Ed this month announced a base rate for its customers of 6.63 cents/kWh.

“In hindsight,” Ishler said in his memorandum, “insisting on the guaranteed price was fortuitous, even though no one predicted that energy prices would drop so significantly. I was told that Oak Forest was one of five communities that had this price guarantee and no company will offer this guarantee anymore.”

Local residents always were given the option of backing out of any aggregation deal and continuing to remain with Commonwealth Edison, if they wished, said Ishler – who noted that the city has saved about $2 million in utility bills since the contract became effective.

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