FRANKLIN COUNTY — Voters in Ziegler, Royalton, North City and residents of unincorporated Franklin County will decide on April 9th whether to enter into a program in which bids are sought for cheaper electricity rates. The corporate authorities of these communities voted to place this question on the ballot: “Shall the City/Village/County of _______have the authority to arrange for the supply of electricity for its residential and small commercial retail customers who have not opted out of such a program?”
Under a relatively new state law, municipalities and counties are now qualified to receive proposals from electric suppliers on behalf of their residents and small businesses under a single contract. If the rates are lower than Ameren’s, residential and small business accounts within community limits, or in unincorporated counties — not already choosing power from an alternative supplier — would acquire electricity from the new supplier, saving residents and businesses money on the power supply portion of their monthly electric bills. This process is called electric governmental aggregation.
To date, over 560 Illinois communities are pursuing municipal aggregation. Moreover, 1.7 million people have already switched away from utility service and are enjoying lower electric bills under various competitive supplier rates.
These municipalities joined 22 other communities in Southern Illinois, and retained the services of Select Energy Partners to assist with the implementation of the aggregation program, including request for proposal creation, running bidding process, and selection of the electricity supplier. These communities include: DeSoto, Dowell, Makanda, Vergennes, St. Johns, Ellis Grove, Evansville, Prairie Du Rocher, Tilden, Eldorado, Creal Springs, Bush, Pittsburg, Hurst, Energy, Marissa, Baldwin, Cutler, Cambria, and residents of unincorporated Williamson and Randolph counties.
Select Energy Partners is licensed with the Illinois Commerce Commission, and recently helped a Consortium of 10 communities — including Marion, Carbondale and West Frankfort – to negotiate a 2-year aggregation rate resulting in savings of $7.1 million. Residents and small businesses will save 25 and 35 percent, respectively.
In the weeks prior to the April 9 election, Select Energy Partners will be holding informational meetings to explain in detail how electric aggregation works and how it will benefit the communities. Details about these meetings are available at each of the communities’ government halls.
If voters give the go-ahead, all of these cities and villages would have the authority to aggregate or bundle the electric accounts of residents and small businesses and to seek bids for competitive electricity rates. Based on current market conditions, it is estimated that program participants will be able to realize in the range of 20-25 percent savings on their electric bills. If prices from electric supply proposals are higher than Ameren rates, the cities or villages would not accept any proposals.
Currently, residential and small business electric rates are fixed annually by the Illinois Commerce Commission. For a number of years, large industrial and commercial customers have had the ability to shop for lower rates in the market place. With electric governmental aggregation, residents and small businesses can now do the same.
If aggregation occurs, nothing will change except that residential and small businesses will be enjoying lower electric rates. Ameren Illinois will continue to operate as a distribution company and does not make a profit on the sale of electricity. Participants would continue to receive only one electric bill per month from Ameren – which would include the new supplier’s lower rate. In the case of storm damage and isolated power outages, Ameren will continue to respond to any and all power outage emergencies just as it does currently.
If the referenda are approved, all communities will hold at least two public hearings to give residents and small businesses the opportunity to provide input on the electrical aggregation plan and proposal process prior to requesting electric supply proposals for electric supply on the open market.
Once the measure is approved, residents and small businesses would automatically be included in the program unless they choose to “opt out”. Before such a program takes effect, the selected supplier would mail out notices to all eligible residents and small businesses notifying them they would soon have a new electric supplier, unless they opt-out. Unlike in many cities, the 26 communities intend to allow residents or small businesses to opt out of the program at any time with no penalty. Residents or small businesses that have already signed a contract with an alternate retail electric supplier would automatically be excluded from the program, though could opt to join later on after their contract expires.
If the referenda pass, and the electric aggregation plan and solicitation process is approved, the first solicitation of proposals would take place in May 2013, at the very earliest. Potential savings from accepting proposals for power supply on the open market would likely be seen on electric bills in late summer 2013.
Requests for an informational meeting prior to the April 9 vote and all questions regarding the municipal electric aggregation can be directed to Nick Hill at Select Energy Partners, nhill@selectenergypartners.com, 618-790-0084.
Select Energy Partners, LLC is a leading energy consulting firm based in Chicago, IL. Select Energy conducts thorough and transparent energy procurement request for proposals (RFPs) on clients’ behalf to ensure the most competitive pricing, terms and contracting.
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