Illinois retailers end 20-year electricity deal with Exelon – Utilities News

on Aug29

29 August 2017 | 10:30 am

A two-decade relationship that helped launch the retail electricity market in Illinois is done. The Illinois Retail Merchants Association has ended its exclusive arrangement with the state’s leading commercial power supplier, Constellation Energy, on behalf of the 20,000 stores it represents.

IRMA, one of the state’s leading trade groups, entered into the deal just as Illinois deregulated its retail market in 1997. That was so long ago that the original arrangement was with the retail unit of Commonwealth’s parent at the time, Unicom. Constellation now is the retail energy subsidiary of ComEd parent Exelon.

But IRMA isn’t getting out of the business. Far from it. The association has hired Brian Hoeger, a longtime executive of Constellation and ComEd, as vice president in charge of energy services. At the same time, it filed with the Illinois Commerce Commission to become an electricity broker. The commission approved the license on Aug. 25.Hoeger is expected to handle procurement on behalf of members who want the service and solicit bids from competing suppliers.

Interestingly, until March, when IRMA hired him, Hoeger managed Constellation’s relationship with IRMA. Suddenly now he’s on the buying rather than the selling side.

The move means that Constellation has lost its comfortable perch as IRMA’s approved sole supplier.

Few if any other Illinois trade organizations have taken such a direct approach as IRMA to help members get the cheapest power deals.

One of the state’s other trade-group heavyweights, the Illinois Manufacturers’ Association, continues to have an exclusive arrangement with Constellation.

Some consultants privately say they’ve been able to find suppliers that could easily beat Constellation’s prices under IRMA’s previous deal. IRMA apparently agreed in the end. “We’ve always been a leader in this area,” IRMA CEO Rob Karr said.

Karr declined to talk about how the new program will be set up, saying it’s a work in progress.

IRMA’s larger members—think chain grocery stores, big-box retailers, drugstore chains—haven’t tended to use the association’s energy program. They’ve hired consultants or handled the procurements in-house to power their stores for years. But smaller or single-store retailers, including independent grocers and hardware stores, have used the program extensively. It’s those sorts of businesses that are likely to benefit.

To be sure, Constellation will continue to compete for the business it was previously getting via the exclusive arrangement.

“This is a prime example that the Illinois retail market is working as intended, and we look forward to the opportunity to serve its members in the future,” Constellation said in a statement. “Constellation is committed to providing competitive rates, and we know price is just one factor in shopping for energy supply as customers and business owners take into account other considerations such as contract options and purchasing strategies.”



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