Electric Aggregation Update
Date: October 20, 2022
Electric Aggregation Update
This week, the City executed a municipal aggregation contract that will start in June 2023. The decision was based on a dip in the energy market that happened in October of 2022. The Stone River Group LLC, a central Illinois based electrical aggregation brokering firm, presented the best option with Constellation New Energy as the new supplier.
With all the volatility in the market over the last 12 months the decision was made to lock in a fixed-all-in price for residential and small commercial customers in Pekin. Ameren customers in Pekin have been receiving electric supply directly from Ameren which has gone up to a price of $0.12236/kWh, their default rate from October 2022 to May 2023. Starting in June of 2023 residential and small commercial customers will pay a fixed rate of $0.11989 kWh, which is 4.5% savings over the current rate. This rate will be locked in for 24 Months, until June 2025. There is no fee to join this program and participants/residents will receive their Ameren bill as normal.
In addition to receiving a savings on the electrical rate, the greater benefit is removing any volatility from the energy market for residents of Pekin. Based on current market conditions and information from many different sources, prices will likely be increasing in 2023. Locking in a rate now will protect participants from that volatility and provide a predictable amount to pay for electricity. Residents and consumers, however, always have a choice to opt-out of the aggregation program to seek other suppliers. A 60-day opt out period will take place next spring before the new rate goes into effect.
Date: June 6, 2022
Electric Aggregation Update
Pekin, along with 34 other central Illinois communities, participates in a regional buying pool (aggregation group) to bring competitive electric supply rates to its residents and small business customers. Every few years, electric supply pricing is bid out and purchased by these communities. The most recent contract ended June 1, 2022. Over the last several months, aggregation group’s electric energy broker (Good Energy) has been working through the high volatility of the electric supply market. Unfortunately, Good Energy has indicated that they were unsuccessful in obtaining an electric supply quote for the group that was cheaper than Ameren’s non-summer rate.
Residents will therefore now be automatically put on Ameren’s utility rates for the next 12-months (June 2022 – May 2023). There is no additional action necessary by the City or its residents for this to occur. Ameren’s utility rates for residential customers is the following for the upcoming Summer and Non-Summer months (cents per kilowatt-hour):
Summer Rates (Jun – Sep 2022) = $.1063 per kWh used
Non Sumer (Oct 2022- May 2023) = $.1273 per kWh used
Good Energy advises that Ameren’s utility rates are likely the best deal and scenario for residents until next year when rates will be bid again. Residents do however have the choice until the end of July to pursue other energy supply options at their discretion, but should be very cautious of the details of any plan (e.g. the fine print), especially if any such plan carries any variable rate terms. Plans can be compared at the following website: https://www.pluginillinois.org/offers.aspx?said=3. Also of note for residents that find another supplier is that if they lock into a long term supply contract, they may not have the ability to take advantage of any aggregated competitive bidding in April/May 2023 when energy price trends are indicating a decline.
The City will keep monitoring updates with electric aggregation and share them as they become available.
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Date: May 16, 2022
Contact: Mark Rother, City Manager, marothert@ci.pekin.il.us, 309-478-5371
There have been many questions brought up about electric aggregation and Ameren’s recent mailing about the termination of the aggregation agreement on June 1, 2022, with electric supplier Homefield Energy. Volatile pricing and supply shortages have prevented the City’s electric energy broker from securing a new contract this spring for the supply of our community’s aggregation program. Customers will therefore at a minimum be returned to Ameren Illinois’ supply for the months of June and July (billed in July and August respectively). Customers do not need to take any action for this transition to the utility’s supply. Ameren has or will send out written notification of this change.
Ameren’s utility rates for residential customers in the following for the upcoming Summer and Non-Summer months (cents per kilowatt-hour):
Summer Rates (Jun-Sep 2022)
TOTAL = 9.881 |
Non Summer (Oct 2022- May 2023)
TOTAL = 11.926 |
Good Energy, the City’s electric energy broker, is diligently working with multiple suppliers to establish a reasonable and competitive price for our community’s aggregation program, which allows resuming our community’s service by August 1. Recent trends have shown a promising decline or moderation in rates. The overall goal will be to achieve a rate that is better than Ameren’s non-summer rate.
Good Energy has therefore advised us to not take any action at this moment and to wait until mid-June to see if favorable pricing can be negotiated; bid upon, and secured for the community and its residents. At the end of the day, however, the consumer can always choose to pursue other energy supply options at their discretion.
The City of Pekin will have a representative from Good Energy at its next regularly scheduled City Council meeting on May 23, 2022, to answer any questions or concerns about aggregation.