Electric supplier deals can save you money

Q: Could you please explain the electric aggregation program that the city of Belleville offers? It seems to me that since Ameren is the only supplier of residential electricity, there’s no competition for Homefield Energy to be brokering a better deal with. And since I’m sure Homefield isn’t in this just out of the goodness of their hearts, the money they make off this deal has to ultimately be coming from the consumer anyway. It sounds like it’s just throwing an unnecessary middleman into the provider/consumer relationship.

A: Repeat after me: Ma Bell is no longer the only telephone company in town.

You can ship with UPS and FedEx as well as the U.S. Postal Service.

And in this area, Ameren is not the only supplier of residential electricity.

I know it’s sometimes difficult to keep up with a world in which a new iPhone seems to come out every few weeks, but, trust me, it’s true. While you would continue to pay Ameren for the transmission and delivery of electricity into your home, you are free to shop around for an electric supplier other than Ameren.

So if you go to www.pluginillinois.org and look for competitors in Ameren Illinois Rate Zone III (which covers most of the metro-east), you’ll find three dozen offers from such companies as Direct Energy, Constellation Energy — and Homefield Energy — ready and willing to provide the juice for your fridges and HDTVs.

The electric aggregation program simplifies this shopping process. Instead of having to wade through the details of dozens of offers themselves, residents have allowed their towns and cities to try to negotiate the best deal by having these electricity supply companies bid against each other.

In so doing, there’s an obvious advantage. Instead of a lot of little Joe Blows dealing with a big company individually, a city like Belleville can guarantee Homefield thousands or tens of thousands of customers at one fell swoop. If you’ve ever bought anything in bulk, I’m sure you’ll realize that offering a horde of customers can lead to cheaper rates.

Since money talks, let me give you a concrete personal example that may jolt your thinking a little. In this case I have trusted that Belleville city fathers knew what they were talking about, so I allowed my electric supplier to be switched from Ameren to Homefield as soon as voters approved the deal on Nov. 6, 2012. (Like you, many probably had been suspicious when they rejected it months earlier.)

The results? Take a look: Since Jan. 1, my four electric bills showed that I used 1,838 kilowatt hours of electricity. Homefield charged me 4.48 cents per kilowatt hour for a total of $82.34. Had I stuck with Ameren, I would have been billed its current non-summer rate of 5.836 cents for a total of $107.27, according to pluginillinois.org. That’s a savings of about a fourth — $24.93. Not enough for a European vacation, but I’m not complaining.

So Homefield is a supplier, not a “middleman.” Sure, the company makes money from supplying the electricity, but they wouldn’t be in business if they didn’t. Ameren, however, does not get a cut from the supply cost and neither does the city of Belleville for brokering the deal.

“No, we absolutely do not get any sort of financial gain from this,” Jamie Maitret, the city’s director of finance, told me. “There is an opportunity with this program that communities can take a fee off of every kilowatt hour used in their communities by people who participate. But we absolutely do not. We’ve opted out of that. This was presented to us as an opportunity to help our residents try and save money by essentially bidding in bulk with other communities.”

In case you missed it, Belleville again chose Homefield earlier this year to continue supplying electricity for the city’s electric aggregation program during the next contract term, which runs from this June until June 2019. Here are the important facts to know:

All current participants will automatically continue in the program. Those wishing to opt out should, by Friday, fill out the card you should have received in the mail. Call 866-692-1262 or write HomefieldCustCare@Dynegy.com for more information.

You will continue to receive one monthly bill from Ameren, which will include Ameren’s delivery service charges. You still will be eligible for such programs as budget billing and other payment agreements. To report a power outage or question a bill, you still call Ameren.

Starting in June, the new Homefield rate will be 5.85 cents per kilowatt hour. You’ll have to check this rate against rates offered by Ameren and other companies if you think you can get a better deal yourself. If you decide on another supplier, you can opt out of the aggregation program at any time by calling or emailing Homefield.

Finally, here’s the clincher: If Ameren’s rates fall below Homefield’s during the contract term, customers will have the option to return to Ameren without penalty. I might also add that Homefield was one of eight suppliers who have received the lowest rate of complaints this year, according to pluginillinois.org.

For more information, go to www.pluginillinois.org and www.ameren.com.

Today’s trivia

According to his wife. Mary Todd, what was Honest Abe Lincoln’s favorite hobby?

Answer to Saturday’s trivia: Just as Route 66 opened the way from Chicago to L.A. in 1926, a brushless shaving-cream company known as Burma-Shave was looking for a way to plant itself into the public consciousness. So figuring he’d have a captive audience in travelers rolling down the road, Alan Odell, the founder’s son, erected the first billboards of sorts. The consisted of sets of 18-by-40-inch signs that became famous for their humor and pithy sayings. The first set popped up in September 1926 on U.S. 65 near Lakeville, Minn. They read, “Cheer up, face — the war is over! Burma-Shave.” By 1960, more than 5,000 sets stood in 45 states with many coming from company-sponsored contests. One you might want to remember is this: “Passing cars when you can’t see may get you a glimpse of eternity.” But as speeds increased on the interstate system, the signs couldn’t compete with standard billboards. The signs disappeared after Phillip Morris bought the company in 1963.

This story was originally published April 16, 2016 at 5:17 AM with the headline "Electric supplier deals can save you money."