Naperville weighs ComEd acquisition against rising utility costs

Naperville city leaders are evaluating the sale of its municipal electric utility to ComEd as the Illinois Municipal Electric Agency contract expires in 2035. City Manager Doug Krieger cautioned that transferring control to the private investor-owned utility would significantly diminish the city's influence over electricity pricing, power mix, and service standards.

The decision affects approximately 60,000 electric customers, with potential implications for household budgets and business operating costs. Krieger stated that trends in the PJM Interconnection wholesale market suggest customers would face higher bills and reduced reliability under a ComEd arrangement, a perspective supported by data cited in GN auto stocks/utilities: electric rates.

Loss of Local Control

Krieger explained that Naperville would lose significant leverage in rate-setting and infrastructure planning if the utility is sold. He noted that unless the city becomes a major shareholder, its ability to influence ComEd's financial decisions would be negligible. This shift contrasts with the current municipal model, which allows direct community input on affordability and service priorities.

Staff identified ComEd as the only viable private purchaser, leaving the city with limited negotiating power. Krieger also highlighted that no other municipality has successfully sold an electric utility to ComEd, making the lack of precedent a significant risk factor for the city's long-term fiscal health.

Historical Precedents and Risks

Officials pointed to Bolingbrook’s sale of its water system to Illinois American Water as a cautionary example. Krieger reported that Bolingbrook staff have expressed regret over the decision, citing issues with service quality and cost management. This sentiment aligns with broader concerns about privatizing essential infrastructure without adequate regulatory safeguards.

Councilman Patrick Kelly described privatization as the least attractive option, referencing Chicago’s parking meter deal as another warning sign. He argued that public utilities should remain under local control to ensure accountability and responsive service delivery for residents and businesses.

Strategic Alternatives Under Review

Naperville is examining several alternatives ahead of a September 28 strategy workshop. These include joining or creating a new joint action agency, or purchasing power through the wholesale market using city-owned generation and storage assets. Each option offers different levels of control and financial risk for the city.

If the council proceeds with a sale, legal negotiations with ComEd would begin in 2030 to ensure a smooth transition after the IMEA contract ends. In this scenario, ComEd would handle electricity supply and billing, though residents would retain the right to opt out and select alternative providers.