Municipal Electric Aggregation question on March 20 ballot

News Release: January, 2012

The city council has approved placing on the March 20 ballot a question that, if approved by voters, could lead to lower residential electric bills by this summer and could also significantly reduce greenhouse gas emissions attributable to the city.

Aldermen voted unanimously Dec. 19 to place this question on the ballot:

“Shall the City of Urbana 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?”

If Urbana voters give the go-ahead, the city would have the authority to aggregate or bundle the electric accounts of most residents and small businesses and to seek bids for a cheaper and possibly cleaner source of electricity.

Right now, most Ameren residential customers obtain power at a fixed rate, with the Illinois Power Agency arranging for the electric contracts. Some of those electric contracts are longer term and are at a higher rate than can now be obtained on the open market.

Consultant Mark Pruitt, the former head of the Illinois Power Agency, estimates that most Urbana residents could see at least an 8 percent reduction in their overall electric bill through municipal electric aggregation. Other consultants have estimated the savings could be as large as 15 percent.

For Urbana residents, that could mean savings of between $80 and $150 annually.

If approved, residents would automatically be included in the city’s program unless they choose to “opt out”. Before such a program takes effect, the city 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, Urbana’s intent is 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 city’s program, though residents could opt to join later on after their contract expires.

Besides cheaper electricity, municipal electric aggregation has the potential to help the city meet long-term environmental goals. Cities can, as part of the bidding process, ask for quotes for 100 percent green or renewable power, or a mix of traditional power and green power.

For example, the Village of Oak Park recently opted to go with 100 percent green power -- through the purchase of renewable energy credits -- at only a tiny premium to what traditional power would have cost.

Bart Hagston, Urbana’s environmental manager, said purchasing 100 percent green power through aggregation would reduce carbon emissions attributable to Urbana by an estimated 30 percent.

Such a reduction would help the city meet its goal of reducing greenhouse gas emissions by 20 percent by 2020 compared to 2007 levels. The renewable energy credits represent renewable power, such as wind or solar power, that is generated and sent into the electric grid. Purchasing such credits provides economic incentive to renewable power generators.

If aggregation becomes a reality, residents would continue to receive only one electric bill per month from Ameren, and Ameren would still be the company to call for power outages, as the utility will remain responsible for electricity distribution and transmission.

The city is in the process of hiring a consultant to help it navigate through the electric supply procurement process. Aggregation would likely not be implemented until July 2012 or later.

The Champaign City Council has also placed electric aggregation on the March 20 ballot, and the two cities will be cooperating in an effort to educate the public.

Additional information about electric aggregation can be found at http://pluginillinois.org/faq.aspx

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