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home : local news : local news June 28, 2016

12/20/2012 12:35:00 PM
Collinsville energy firm wins aggregation bid
After a November referendum vote and a Tuesday bid opening, about 12,000 Crawford County households can expect to see their electric bills drop by 25 percent or more, beginning in the spring.

Bids returned Tuesday will provide residents in Robinson, Oblong, Hutsonville, Palestine and unincorporated Crawford County a discount on the rates they pay for electricity, amounting to about $150 to $170 for each household annually. The process is a result of the municipal electric aggregation referenda approved by voters in November.

Users in Robinson, Oblong, Palestine and unincorporated Crawford County will pay 4.1 cents per kilowatt hour, saving them 28 perecent on their electrical bill, said Robert Berty, executive director of Crawford County Development Association. This compares to the current Ameren rate of 5.4 cents per kilowatt hour. The winning bid, from Homefield Energy, will save $150 to $170 a year, according to a press release from Good Energy, a consulting firm.

It will be possible to opt out from Dec. 18 to Jan. 5, the release said.

Stoy and Flat Rock have a different agreement.

Good Energy was secured by the county and individual communities - along with more than 45 other communities, representing about 230,000 households in 18 central and southern Illinois counties - to seek bids on their behalf for electricity on the open market. Good Energy represents about 520,000 households in Illinois.

"This likely is the largest residential purchasing group in the country and a testimonial to buying in bulk," says Good Energy Managing Partner Charles de Casteja. "Furthermore, the potential for greater purchasing power, extraordinary contract terms, and leveraged representation at the state level with all affiliated agencies, is a win-win for single customers in these Good Energy communities."

By bundling residential and small business electric consumers, Good Energy was able to achieve a substantial savings by buying energy supply from the open market. Municipal aggregation is intended to create bargaining power, putting smaller energy consumers on equal footing with larger users and it stimulates competition.

Compared with the current Ameren rate of $0.054 kWh, the low bid received Tuesday means households will save between $150 to $170 per year on electricity, and many may save even more. Residents should expect to see the savings on their utility bills beginning in March.

Good Energy selected Collinsville-based Homefield as the low bidder after a competitive bid with five other leading alternative retail electric suppliers Tuesday. Homefield will deliver electricity at contract rates of $0.03909 per kilowatt hour (kWh) to $0.04099 cents during the span of the 17 month contract. The high bid was $0.044 - 4.4 cents.

"Consumers are harnessing the benefits of deregulation in Illinois through referendum statewide that allow competitive bidding processes," de Casteja said.

Good Energy originally had projected savings of between 20 to 25 percent compared to current rates. The actual savings based on Tuesday's bids will be 25 to 30 percent - depending on usage. Communities also were able to select from a renewable energy provider.

A little more than half of the communities in the recent purchasing group chose to purchase 100 percent renewable electric production - all green.

Tuesday's buying group joins nearly 300,000 Illinois households that already are seeing the benefits of collective buying power of between 25 and 33 percent, or about $20 per month.

More than $150 million over two years: That's the amount of combined savings electric consumers statewide participating in municipal electric aggregation will reap over a two-year span.

"Since the middle of June, citizens of the city of Peoria have been saving between 20 and 30 percent on their electricity bills," says Chris Setti, Peoria's assistant city manager. The City of Peoria in central Illinois was in the first buying group. "It's a great opportunity for a public body to be able to offer this to our citizens and constituents and keep more wealth in the community. The electricity market is a very confusing place and we couldn't have done this on our own."

The Citizens Utility Board, a consumer watchdog/ advocacy group, says community electric aggregation is a good option to have.

Communities statewide first chose a consultant and approved a referendum to be placed on the ballot, followed by residents approving the referendum. The consultant and municipality then developed an aggregation plan of operation and governance, hosted public hearings for transparency, followed by the bidding process with suppliers. There still are opportunities for municipalities who did not join the first or second group to join Good Energy's third round buying group for an April referendum.

Residents between Dec. 18 and Jan. 4 will receive two letters that will include the winning offer rate and percentage of savings with additional details for the program. Also at this time, residents can choose not to enroll (opt-out) with no penalty.

If individuals decide to opt out after becoming part of the aggregate, they still can with a small termination fee.

Residents who do nothing automatically are enrolled and new electric supply rates will begin in early 2013.

Residents who opt out will return to the rates offered by the utility with no additional charges.

All residents and small commercial accounts will continue to receive one bill.

With the passage of the Illinois Power Agency Act in Illinois in 2007, municipal electric aggregation became available. This allowed local authorities to negotiate electric power supply for smaller consumers.

In 2009, the governor signed a public act that allows communities the authority to bargain on behalf of their residents for cheaper electricity. The purpose of deregulating electricity markets was to increase competition, lower costs and give residents the power to choose. Governments and large business in Illinois already do this.

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