Cities launch information campaign on electricity ballot question

Cities launch information campaign on electricity ballot question

CHAMPAIGN — Bus billboards and a new website have sprung up as the cities of Champaign and Urbana try to inform residents about a ballot question voters will see on the March 20 ballot and the potential savings they could see on their electric bill.

The referendum will ask residents whether they are willing to give city officials the authority to negotiate their electric supply prices — a growing trend called "municipal electric aggregation," a term organizers are trying to simplify for residents.

"We have a complicated-sounding question on the ballot," said Urbana Mayor Laurel Prussing. "It's a lot easier to say, 'Power is money.'"

That will be the cities' slogan on a flashy new website, PowerVoteCU.com, and 20 billboards along the sides of Champaign-Urbana Mass Transit District buses. The two cities split the cost of the $13,300 marketing campaign.

Government agencies cannot explicitly say how they want residents to vote, but officials are driving home the point that residential and small commercial electric customers in Champaign and Urbana could see savings as high as $125 in the first year if the ballot question is approved.

All residents and businesses already have the option to shop for better electric rates. While Ameren Illinois delivers electricity and bills the resident, the customer typically purchases the energy itself from a different supplier.

If customers have not negotiated a lower rate — and the vast majority of residents do not — they will pay a default rate. That rate is currently 6.3 cents per kilowatt hour, said Mike Monson, Prussing's chief of staff.

If voters approve the question, the cities would have the authority to act as brokers, purchasing electricity in bulk and negotiating a lower price for all residents who have not opted out of the program.

Monson said that negotiated price could be as low as 4.8 cents per kilowatt hour — a potential savings of about 25 percent on the electricity itself.

Customers also pay Ameren Illinois for the delivery of energy. That price would be unaffected, making the total savings on a typical customer's bill closer to 15 or 20 percent.

The difference between the bulk and the non-negotiated prices could narrow in coming years as the default rate is expected to drop below 6 cents per kilowatt hour, Monson said. But he said the negotiated price would be "considerably lower" than the default rate.

"The best savings will be this year," said Champaign Planning Director Bruce Knight. "So we really wanted to get this up and running as soon as possible."

More and more Illinois municipalities have initiated such programs. Knight said about 20 communities had the question on the ballot last year, and about 150 have put forward questions on ballots this spring.

If voters say "yes" to the question, it would also give cities the authority to shop for 100 percent renewable energy, an option Prussing says the city of Urbana is likely to pursue.

The question

Voters will see this question on their March 20 ballots:

Shall the City of (Champaign or Urbana) 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?

Comments

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CJ Williams wrote on February 20, 2012 at 3:02 pm

You really want me to have the City negociate MY  electrical bill?  Really I want Donnie boy and Bruno into my pocket even more than they are now?  Nope.

I'm Lovin' It wrote on February 20, 2012 at 6:02 pm

Here's the great part: if you don't like it vote against it. Here's the second great part: if it passes you can opt out of it. By the city negotiating the price based on the size of the group you can save money. It's such a non-socialist idea that I believe the chamber of commerce has some sort of arrangement with its members. Unless of course you don't consider the chamber of commerce to be capitalists.

mankind wrote on February 20, 2012 at 3:02 pm

Call me cynical but any time someone pushes something this hard they're doing it for more than just the goodness of their heart. I want to know what's in it for city government to bargain rates.

Patrick Wade wrote on February 20, 2012 at 9:02 pm
Profile Picture

Thanks for your comment. I was wondering the same thing after this morning's press conference and didn't have an answer. I emailed Champaign Planning Director Bruce Knight tonight to ask that very question: "What's in it for the city?" I've published his response in a blog post here. Hopefully that helps to answer your question.

mankind wrote on February 21, 2012 at 1:02 am

Thanks for your additional reporting, Mr. Wade. It's good to see them address this question, anyway. I guess it would make them look good at election time to be able to say they lowered energy bills. But I wonder what Ameren thinks of this program. Surely they don't come to the negotiating table with the city and just give up $1.4 million without getting something in return. 

I'm Lovin' It wrote on February 21, 2012 at 10:02 am

It matters not to Ameren. They do not make money on the commodity charge for the electricity they themselves have to purchase since they sold their generation. The commodity is a pass-through. Ameren and other utilities who purchase the commodity, gas and electric, make their money on the delivery charge - that charge is set by the Illinois Commerce Commission. That charge is unaffected by what the city is proposing. 

mankind wrote on February 21, 2012 at 2:02 pm

Well, the delivery charge is approved or denied by the ICC, but Ameren brings them the proposed charge. I suspect it's easier for them to get an increase if the average electric bill is $70 instead of $100. Anyway, not to be a conspiracy theorist, but this whole thing just feels weird, and the only neutral source I can find on it -- other than the N-G -- is the Citizens Utility Board, and they say it's not clear in the long run whether this arrangement would save customers money. At least they didn't say it was a scam. Maybe I'm underestimating the altruistic nature of our elected officials and power companies. How did this get on the ballot?

Charles Chapin wrote on February 21, 2012 at 5:02 pm

Kudos to you, Patrick for responding to the comments with some additional reporting. Thanks.

pattsi wrote on February 20, 2012 at 3:02 pm

Power Smart Pricing offers the very best savings on the electrical part of the utility bill. The recent Ameren mailing has an information flyer about the program. Here is more information

http://www.powersmartpricing.com/

sluskiier wrote on February 21, 2012 at 11:02 am

Definitely!  I started using Power Smart Pricing about 6 months ago and save about $10 per month.  I live in a small, 1 bedroom apartment, though, so my bills aren't much anyway.  Someone who lives in a bigger house would likely have a pretty hefty savings.  I can't think of any reason why you WOULDN'T go with Power Smart Pricing...there are no disadvantages, in my opinion.

serf wrote on February 21, 2012 at 7:02 pm

I've been using the PSP program since 2007.  For 08-10, I saved 15%, 26%, and 12% each year over Ameren's regular rate.

There is a downside though.  U gotta remember that you are paying an hourly rate for your electricity.  This means that it's typically pretty cheap when demand for electricity is low (like overnight and on the weekends).  But, when demand is very high, the hourly rate can spike to 2 or 3 times the regular rate.  Typically this only happens on hot summer afternoons when everybody is using their air conditioners.  

The whole idea is that you adjust your electricity usage to low peak times.  This personally saves you money and keeps the extra stress off of the power grid.  The reality is that since the economic downturn a couple of years ago, electricity has been very cheap around the clock.  As you can see today, the hourly rate for electricity never got above 3 cents per kWh.  That's cheap.

 

https://www2.ameren.com/RetailEnergy/realtimeprices.aspx

 

 

sluskiier wrote on February 20, 2012 at 4:02 pm

Hey, if they can save me even a little bit on my electric bill, I'm all for it.  There doesn't always have to be an ulterior motive.

David Illinois wrote on February 21, 2012 at 6:02 am

Is it a conflict of interest to use City dollars to promote the City's desired outcome?  Why not just use City funds to pay for Prussing's re-election?

Mark Taylor wrote on February 21, 2012 at 10:02 am

I think the UN is behind this, just like they're behind all the bike lanes we suddenly see all over town. It's all part of their fake science global warming hokum. Next they'll want to take over the water supply, and you know what that means. The more they control these aspects of our lives, the more they CONTROL US! No thanks. I'll gladly pay 15 - 20% more on my bills to these good American companies to PROTECT MY AMERICAN LIBERTY AND FREEDOM!

This is why you all need to vote Republican. I prefer Santorum by a wide mile but I'll even vote for the rhino Romney because he's light years better than 0bama.

Sid Saltfork wrote on February 21, 2012 at 12:02 pm

Are you playing Steven Colbert? :)

serf wrote on February 21, 2012 at 7:02 pm

I'm not sure either.  The whole UN thing automatically makes me think he's just kidding.  But the rest of it makes it sound like he really believes what he's saying.  I'm confounded...

Mark Taylor wrote on February 22, 2012 at 2:02 pm

Do some research. The UN absolutely is instigating bike lanes all across the country.  They got smart about it in Colorado but the typical libs served their messiah and bowed down before the UN. The whole idea is to mandate that we use less power so China can have more. 

And no. I'm not "playing Steven Colbert". Although, I do find it humorous that so many libs follow him. I've read from multiple sources online that Colbert actually is conservative - he's just playing a joke on the libs and the lame stream government run media who are to arrogant to understand that he really is laughing at them. 

Sid Saltfork wrote on February 22, 2012 at 4:02 pm

I love it.  You do have a sense of humor.  It helps draw out the comments.  The spelling, and rhetoric had me believing for a while.  Thanks for the comments.  Good work. ;)