Municipal aggregation update: Residents to save 36 percent on electric supply costs

News Release: May, 2012

URBANA – Many city residents will see savings of 36 percent on the electric supply portion of their power bills, starting in August, after Mayor Laurel Prussing signed a two-year contract with Homefield Energy of Collinsville.

City officials estimate that the average Urbana residence using 10,000 kilowatt hours of electricity per year will save $195 per year with the Homefield bid, compared to current prices.

Homefield Energy bid for Urbana was 4.05 cents per kilowatt hour for a two-year contract that includes 100 percent renewable power.

That’s 36 percent below the current default rate charge by Ameren of 6.36 cents per kilowatt hour. Electricity costs make up about 60 percent of a resident's overall electric bill (distribution costs account for the rest).

"We think this is a great savings for residents," said Prussing. "It turned out even better than we expected."

Homefield Energy is the residential electric supply option from Ameren Energy Marketing, a retail electric supplier that operates wholly independently from Ameren Illinois. Ameren Energy Marketing is a subsidiary of Ameren Corp.

The Urbana City Council in April approved signing a contract with municipal electric aggregation consultant Good Energy, based in New York City. Urbana was one of 51 cities, villages and counties in Ameren territory that were part of the massive Good Energy aggregation, which included 260,000 residences and small businesses. Homefield Energy beat out three other bidders to serve the 51 communities, which also included Peoria, Pekin and Morton.

The bid opening took place at noon Tuesday, May 8, in the Gateway building on the riverfront in downtown Peoria.

Urbana voters overwhelmingly approved March 20 a referendum authorizing municipal electric aggregation, which allows cities to bundle – or aggregate – residential and small commercial retail electric accounts and seek bids for cheaper power. Currently, Ameren customers receive power generated from various power suppliers via contracts arranged through the Illinois Power Agency.

Within the next few weeks, Urbana residents eligible for the aggregation program will receive what is known as an opt-out letter on city letterhead. Returning the letter allows people to decline participation in the city’s program, if, for whatever reason, they choose not to participate. 

Residents who want to receive 36 percent savings should set aside the letter. No response is necessary and residents who don’t return the letter will automatically be signed up for the city’s program.

Residents can expect to see savings with their August bill from Ameren. The savings are expected to begin with power used during the month of July.

Some residents will not be included in the program, including residents who have opted for an hourly pricing plan known as Power Smart Pricing as well as residents who have already signed a contract with a retail electric supplier.

The city intends with Good Energy and Homefield Energy to periodically run “opt-in” programs for residents who are not a part of the initial aggregation program but want to join, and for those residents who move to Urbana after the opt-out letters go out. The city will work with Good Energy and Homefield Energy to help residents determine which electricity program will save them the most money.

More than 14,400 residences and 900 small businesses in Urbana qualify for the aggregation program and will be receiving opt-out letters this month.

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