Council agrees to continue electric aggregation program

Reg Ankrom
Posted: Aug. 11, 2015 12:01 am Updated: Aug. 24, 2015 11:49 pm

Staff Writer | 217-221-3391 | @MHopfWHIG

QUINCY -- The Quincy City Council agreed Monday to continue the city's electric aggregation program that voters approved in November 2012.

The program allows residents and small businesses to be grouped together and have electric supply bid on the free market, then lock in a rate for 12 to 36 months. The program does not affect delivery fees or billing and maintenance, which are still provided by Ameren Illinois.

Reg Ankrom, president of the city's aggregation consultant Simec Illinois, said the firm can now prepare to bid out.

"It gives us the opportunity to go ahead and pursue weather conditions that will give us better prices," Ankrom said. "We're in an El Nino weather pattern. Historically, an El Nino has been followed by cooling temperatures, and that's what we will be shooting for."

The three-year aggregation contract with First Energy expires in February. The city locked in a price of 4.194 cents per kilowatt hour. Customers without a rate deal now pay an annualized rate of about 6.2 cents per kilowatt hour.

Ankrom said the electric supply rate will go up in the next contract.

"Starting in June, Ameren's base capacity charge rose by about 30 percent and that's built into the fixed rate," he said. "Without question we will see it bump up, but we will be below Ameren or we will recommend to the city that all customers return to Ameren."

Ankrom said suppliers in Illinois dropped a price match provision, where they would meet the electric supply rate of Ameren if its cost dropped below the fixed rate. However, he said Simec would encourage customers to opt out of the program if Ameren's rate drops.

The council approved two ordinances -- one to allow the program to continue with the mayor signing a contract in the future and another to keep Simec, LLC, on as the city's consultant. Aldermen voted 12-1 on both ordinances, with Alderman Terri Heinecke, R-7, voting against continuing the program and Alderman Mike Rein, R-5, voting against retaining Simec. Alderman Tony Sassen, R-4, recused himself from voting because he works for Ameren.

Residents who do not wish to participate in the city's program can opt out and chose to remain with Ameren or go with another supplier.

Aldermen were asked to reconsider hiring Simec as a consultant.

Matt Anderson, chief operations officer of Anderson Consultants, said he believes city residents paid more in some months of the contract because the purchased electricity adjustment is not included in the fixed price. The purchased electricity adjustment can make prices increase or decrease based on what Ameren paid for the electricity and what it charges customers. This can potentially reduce the price of electric supply.

"At one point the Ameren tariff service rate did drop below our aggregation price," Anderson said.

However, Ankrom said customers of retail electric suppliers are not subject to the purchased electric adjustment.

"The (Illinois) Commerce Commission has given us only two parts that we compare to," he said. "One is the electric commodity, which is the large price, and the other is the transmission charge."

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