Community Choice Aggregation. An Opportunity to Seek Lower Electric Bills for Residents and Small Commercial Customers

Transcription

1 Community Choice Aggregation An Opportunity to Seek Lower Electric Bills for Residents and Small Commercial Customers

2 Community Choice Aggregation Municipal Electric Aggregation or Community Choice Aggregation is a program that allows local governments to bundle - or aggregate - residential and small commercial retail electric accounts and seek bids for a lower cost supply of power. Currently, Ameren Illinois customers receive electricity at a price set each year by the Illinois Power Agency, a governmental body that secures electricity on the wholesale market on behalf of Ameren Illinois. By bundling residential and small commercial accounts, municipalities can go into the open market to seek a lower rate for electricity supply. 2

3 Why Savings Exist Since the current rate is set every May by the IPA, the market can react to it, and often provide a lower rate. IPA rates are tiered, with a portion of the cost always lagging the current market rates. Right now, residents and small businesses pay a higher rate than most large commercial, industrial and institutional accounts that have sought open market bids. Municipalities, as with larger commercial electric users, have used competitive bidding to obtain lower electric rates for various municipal facilities since electric deregulation made that option available four years ago. 3

4 Buying Power Combining the residential and small commercial electric accounts within the City of Galesburg creates a more attractive electric load for the suppliers to bid on and supply. Suppliers do not have to solicit to individual residential and commercial loads, thus saving them the acquisition costs on a per customer basis. They can pass that savings onto the customers. Municipalities, as with larger commercial electric users, have used competitive bidding to obtain lower electric rates for various municipal facilities since electric deregulation made that option available four years ago. 4

5 The Referendum State Law requires municipalities to ask their residents the following question in order to run an aggregation program: Shall the [Your Village or City] 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 the referendum passes with a majority of affirmative votes, then a municipality must take several steps, as required by law in order to run an aggregation program. 5

6 The Process If the referendum is approved by a majority of voters: Develop Plan of Operation and Governance. Hold 2 Public Hearings on the Plan of Operation and Governance. Adopt the Plan of Operation and Governance. Pass an Ordinance authorizing the Municipality to arrange for the electricity supply of residential and small commercial retail customers. Solicit new bids for electricity supply based on Plan of Operation and Governance. Only bids meeting plan goals and which are lower rates would be accepted. Residents by law, MUST be notified in writing of their option to opt-out of the program. After opt-out period, customers who have NOT opted out will be included in the contract for new electricity supply. 6

7 Ameren Illinois Role Ameren Illinois is a distribution company: Responsible for maintaining the wires Responsible for metering and billing Responsible for outage response Ameren Illinois makes money for delivering power, regardless of supplier Supplier of Last Resort 7

8 For Residents Only Supply Portion of Your Bill Changes Ameren Illinois Still Delivers the Electricity Your Bill Still Comes from Ameren Illinois If the Lights Go Out, You Still Call Ameren Illinois You Can Opt-Out of the Program Before It Begins A New Supplier is Only Selected if the Rate is Better 8

9 Opt-Out Requirements Law requires residents and small business to be able to opt-out. No one can be forced to change their electric supplier. Opt-Out is without penalty and before the program begins. Must be informed in writing how to opt-out. Opt-out is proactive, if you take no action you will be in the aggregation program. 9

10 Technical Assistance DaCott Energy Services, LLC has been hired by The City of Galesburg to provide technical assistance with the aggregation program. DaCott will assist the City of Galesburg in designing and implementing the aggregation of electric supply services for residents and small commercial accounts. DaCott will be collecting and analyzing consumption and demand data, identifying specific opportunities to achieve optimal pricing. DaCott will prepare load analyses and design the optimal aggregate energy supply program. DaCott will prepare the bid format to be submitted to electric suppliers, evaluate supplier responses and assist in negotiation of contract(s) with selected supplier(s). 10

11 In Summary Goal is to save money on electric rates Voters must approve referendum Residents can opt-out before anything changes If rates aren t lower, they aren t accepted 11