I just watched a video in which Dennis Schmidt and others described the upcoming opportunity to vote to implement a Muni Electrical Aggregation program for Champaign. This may be a great thing. However, the video raised several questions in my mind. First of all, it appears to promise a "free ride"; join the program and your supply price goes down, no caveats, no issues. My whole life, I've noted there are no free lunches so I guess I need to understand why this case is so different. If aggregation causes the price to decrease, then markets would force the other Ameren suppliers to match the price or they would not be able to sell any power. The only thing that I can see that could reduce the impact of market forces are government interventions. In the video, reference was made to a "current default rate" which leads me to believe that the current default rate may be something already impacted by state government (perhaps ICC [or some other agency] sets the rate). How will we assure market forces will not be impacted by City government influences if the aggregation plan is unknown at this time?
The video says if the referendum is approved, the City will, with public input, create an aggregation plan that includes procedures and goals for the program. This seems to be the 900 lb elephant in the room. It seems impossible to me that the City is so altruistic and its employees have so much time on their hands that no new employees would be required, the cost of which would have to be in some manner borne by the program. Also, unless the plan specifically excluded it, it would not be a surprise to me to find that fees would be established for certain actions (such as opting in after originally opting out or vice versa). Also, it would be no surprise to find that my Ameren bill would incorporate some new charges. Currently my electric bill shows only one local charge, a "Champaign Municipal Charge" ( the local tax) but my local phone bill has the local tax plus an additional 911 fee and my water bill has the local tax and a Champaign franchise fee, a Champaign fire protection fee, and an incomprehensible QIP surcharge. I guess you can call me jaded but I've never seen any government miss an opportunity to increase its revenues when a new opportunity ensues. When I ask myself, "What's in it for the city to set this up for us poor rate payers", unfortunately, I conclude that the answer is new revenue opportunity. (I can think of several new fee opportunities the aggregation program might spin off but I won't state them because maybe they might strike someone as great ideas.)
Although the Champaign video makes a point that the goal of the aggregation is cost savings to the customer, there is a light reference to forcing suppliers to use cleaner energy sources. A similar Urbana video makes it clear that forcing clean energy sourcing would be a significant objective of an Urbana aggregation program. If this becomes a major feature of an aggregation program, then the opportunity to reduce end user costs decrease sharply.
One thing that must be addressed, although understandably never discussed, is potential for corruption. Unfortunately, this state has a well deserved reputation for corruption at all government levels. The ability to negotiate rates with multiple suppliers for huge energy volumes posses a huge opportunity for fraud. Strong checks and balances would have to be in place to protect the City and its citizens from potential abuse.
My major question is this: How can we vote on Electrical Aggregation plan if we don't have the slightest idea what the framework, structure, or even objectives of the aggregation plan would be? My second question is this: Can I be on the committee that develops the aggregation plan?
Blue…,
There’s a couple of things that are a bit bothersome about your post. Although I’m not well studied on the current mater of the Champaign NEA proposal, there are some areas of electrical services in which I am well aware.
First off, being a member of a rural COOP, we pay some of the highest electrical rates in the country. Our personal membership in the COOP allows for regular reports and meetings that consistently focus on wholesale rates and possible alternative generating opportunities. None of which ever get into double digit savings. So to think you could achieve even a 5 or 6 percent reduction in your power bill is an extremely outstanding goal, much less a fantasy of 20%.
Furthermore, natural gas prices have a significant impact on electrical rates, as some of the older coal fired plants have either been converted or are being converted to natural gas. To say nothing of the countless “Peeker Plants”, built in the last 15 years that dot the countryside. Those remote controlled natural gas fired turbine generators that can be turned on and off within minutes, “the” most inefficient form of electrical generation, which leads to higher electrical costs and increased CO2 output.
As for how the debate on electric rates and generation have ties to our import of foreign oil is a real stretch, since little of our electrical generation in this country uses oil.
However, it should be pointed out, that those communities which do have their own local generation, enjoy very reasonable electrical rates with outstanding service. http://www.farmercity.org/city/lpowerplant.html
http://www.rantoulpress.com/news/politics-and-government/2011-11-01/rantoul-honored-illinois-municipal-electric-agency%E2%80%99s-generat
I am opposed to aggregation. The savings is being misrepresented. Councilman Bruno commented a 20%+ savings on our bill. He is misleading the public. The only components they can try to negotiate a lower price for are the electricity commodity and the transmission service charge. I called an aggregator that left a door knocker Intergrys and my savings would be $1.98/month. Bruno needs to come clean on this. They also need to tell us what the city gains from this. And what are they going to do to protect us against upside pricing when natural gas goes up which it always has.
People need to realize the same power plants that generate our power now will provide the power. I do not like having my choice to participate taken away which is what the city council is doing. The aggregators are pushing this now because grid power prices are at 20 year lows because natural gas is low and it drives the wholesale price of power. What is not being told is that once you leave the regulated rate you will be exposed to much faster fluctuations in power prices each year? Natural gas cycles and the price can change by several hundred percent is a short period of time. Gas has gone from about $1.50 to $20 dollars and down again in a just a few years time. I like having a regulated buffer in my rates.
When you take the commodity and transmission charges out of Ameren’s cash flow they will just go to the ICC to raise other costs. Deregulation of electricity was nothing but a scam. Just like deregulation and the so called competition in the cable services. How do you like your savings there? Same as with phone service. Each time a necessity like power and cable are deregulated the consumers get hit with much faster price increases. There is no competition in the electric market the same plant will be providing the power. Vote no on aggregation unless they have an opt out clause.
The other scam is this renewable energy sources. Some city leaders are stupid enough to require a certain percent be renewal like wind. They are clueless as to how generation is placed into the market. If wind can generate it is placed online preferentially over all other generation. Wind generator like to sell municipalities their power because they get more money going to an end-user aggregator than the selling to the ISO (independent system operator). In other words buying renewable power is a waste of money. If it can be online it’s online so you’re not helping anything by making municipalities by the power.
"Honesty" is not only misinformed, but also lying.
Ameren endorses this practice as they are the distributor of power, not the supplier. Ameren makes no money off of the price of electricity and their rates will not be affected otherwise. This has been well documented.
The "Door-Hanger Aggregators" and Chamber of Commerce are "for profit" intermediaries who use this tool as a revenue source. The Cities of Champaign and Urbana are not, so the savings will, in fact, be as much as 25-30% off a typical home or small business electricity costs.
The "choice" is a lie as well as citizens can opt out (and currently must "opt-in" to have a choice anyway). This has been well-documented.
This has nothing to do with natural gas and the comparison is erroneous.
Utilizing renewable energy sources reduces our demand on foreign oil. Period.
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