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Hinsdale Board Selects Village's New Electricity Supplier

Nordic Energy Services is expected to replace ComEd as Hinsdale's supplier this summer.

The supply portion of Hinsdale residents’ electric bills will shrink by 40 percent thanks to an agreement that was approved Tuesday night with an independent electricity supplier.

About six weeks after on the March 20 primary ballot, the Board of Trustees voted unanimously in favor of a three-year contract with Nordic Energy Services for the supply of electricity to Hinsdale residents at a rate of 4.62 cents per kilowatt-hour, about 3 cents lower than the current ComEd rate of 7.73 cents per kilowatt-hour.

That ComEd rate will be re-set in June and will likely go down to around 7 cents, said executive director David Hoover of Northern Illinois Municipal Electric Collaborative (NIMEC), the village’s aggregation consultant who oversaw the bidding process. 

“Regardless, the [Nordic] pricing is very attractive,” Hoover said.

Nordic’s three-year bid was the lowest of six suppliers who submitted for the village’s business. The next lowest rate was 5.19 cents per kilowatt-hour from Direct Energy.

Hoover said he thinks Nordic’s low rate is a sign they want the village’s business based on Hinsdale’s high usage per customer.

Nordic president James Deering was present Tuesday night.

“We would be thrilled to have the account,” Deering said before the vote.

Currently, Nordic’s only aggregation client is Erie, Ill. Deering said approximately 300 municipalities recently approved electric aggregation, and based on the bids Nordic submitted, he expects his company to get the accounts of 10 to 20 percent of those towns.

Besides being an alternative supplier for aggregated municipalities, Nordic is in the natural-gas supply business. The Oakbrook Terrace-based company manages all of the City of Chicago’s natural gas assets.

“We can handle accounts this size and much larger,” Deering said of Hinsdale. “It really fits right into our normal business.”

Nordic will not charge early-termination fees and will provide a rate guarantee if ComEd’s rates become lower than Nordic’s in the future. Should ComEd’s rate go below 4.62 cents in the next three years, Nordic will have to match that rate or the village will have the option to go back to ComEd.

Hoover said the goal is to have the new rates in place by July. Between now and then, a sales agreement needs to be finalized with Nordic, residents need to be given a chance to opt out of the rates, and details need to be worked out with ComEd.

July sounded good to trustee Laura LaPlaca, who said the village had previously anticipated the rate change to take place in September or October. 

ComEd will still distribute the electricity with its infrastructure and be responsible for repairs and billing. 

NIMEC took one-year, two-year, and three-year contract bids. Nordic offered a one-year rate of 4.01 cents per kilowatt-hour and two-year rate of 4.29 cents per kilowatt-hour.

Hoover said the one-year rate Nordic offered would be the lowest rate in Illinois, but would not be guaranteed after that year. The advantage of the three-year option is that if electric rates rise with an improving economy and increased natural gas demand, the village’s low rate will not change.

No trustees spoke against the three-year option.

Joe O'Donnell (Editor) May 02, 2012 at 03:07 PM
Residents will have a chance to opt out of the program, and since there were some voters who voted against aggregation, I assume there will be some who will opt out. I'm curious if any readers are among those folks and, if so, why opt out?
Joe Howard May 02, 2012 at 04:39 PM
Residential aggregation is market socialism as the largest houses subsidize the smaller homes based on load factors. If you own a large home, opt out.
J. Geoff Rove May 03, 2012 at 12:17 AM
Some of your neighbors in the "township" already signed with alt. suppliers last year. My supplier, lets call them Enron Jr., offered a rate 15 percent below Exelon. I'm curious what the source power plants are, or is Nordic just buying futures contracts ??
Gary K. May 04, 2012 at 03:10 AM
Thats only because ComEd's allocation of capacity and transmission costs is backward. Everyone pays the same for capacity and transmission regardless of how much they actually use. If anything, it is the small homes that are subsidizing the large ones.
Daff Fedil May 25, 2012 at 06:24 AM
I'm with Joe - very curious about downside risk. Who out there voted against it and why? Will ComEd charge more for delivery? Don't think so. What else then? Why not save some scratch?

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