Those who buy together, save together
DEPUE — Nine days after tabling any action, the DePue Village Board approved an electrical aggregation agreement with Malden, LaSalle and three other communities that should save each residence more than $100 per year for the next two years.
In March, DePue voters, along with voters from more than 200 other Illinois municipalities, gave their city leaders the authority to arrange for the supply of electricity for its residential and small commercial retail customers.
The village held public meetings on May 11 and May 14, which included a question and answer session with Shawn Ajazi, energy operations manager of the Progressive Energy Group of Aurora. Ajazi is a consultant, and his company is trying to put several communities together to get a greater volume discount.
On May 14, Ajazi explained the program, but DePue Village Attorney Jacob Frost had several questions he needed answered before he gave his approval to hire Progressive Energy and move ahead with the aggregation.
Ajazi and Progressive managing partner Arnie Schramel were back for a special meeting Wednesday.
Ajazi said LaSalle had approved a three-year contract, and Malden and the other three communities had approved a two-year contract. All of the contracts were approved with supplier Ameren Homefield Energy, which operates independently from AmerenIP.
Ajazi said it wasn’t too late for DePue to be part of the aggregation.
“You need to take action this morning to be a part of that group,” he said.
Ajazi said they solicited bids from seven different suppliers, and Integrys had the lowest price at 3.9 cents per kilo-watt hour for a one-year contract; but there were some problems. Integrys did not waive the $25 penalty for consumers to switch suppliers and only provided pricing for the six-community aggregation.
Suppliers that met DePue’s guidelines were Homefield and First Energy. Homefield offered a price of 4.0 cents for one year and 4.2 cents for a two-year contract. AmerenIP’s new rate for July to May 2013 is 5.7 cents.
Ajazi said two-year contracts were more expensive because prices are trending upward, and the supplier can’t guarantee the lower rate would still be available for the second year.
Ajazi and Schramel said they recommended the two-year contract for several reasons. Schramel said electricity is as cheap as it’s been in 20 years, and prices will go up, especially if EPA pressure to close some coal plants is successful.
In addition, if DePue only approved a one-year contract, it would be out of the aggregation at the end of the year since the others had approved longer contracts. Schramel said his company would automatically terminate the agreement with Homefield at the end of the contract, but include them in the list of suppliers that could bid on a new contract.
“You’ll get a better rate if it’s competitive,” he said.
The switch should take place in late July or early August. Ajazi said they would like to send a letter on village letterhead explaining the switch and giving customers an opportunity to opt-out. He said the average opt-out rate they have seen has been about 3 percent.
Customers on an all-electric program or who have already selected another supplier will not be included.
Frost said he could see the benefit to working with the other communities, but he still had some hesitation about deciding so quickly.
“This is a judgment call,” he said.
Frost said he would have preferred to have more time to review bids from all of the suppliers, but the village needed to assume it was being presented the “cream of the crop” from Progressive.
“We have a consultant telling us this is a good deal and this is what we should,” he said.
Village President Eric Bryant gave his approval, and trustees Terry Libby, Lyle Behm and Dan Hoffert voted in favor of the agreement.
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