Urbana approves bidding pool for better electric rates
URBANA — City council members on Monday night gave administrators the green light to add Urbana to a bidding pool that they believe will get residents better rates on their electric bills.
An agreement with Good Energy would lump the city in with 53 other Illinois communities whose residents recently approved municipal electric aggregation programs. The program was approved in Urbana by a 2-to-1 margin during a March referendum.
Mike Monson, chief of staff to Urbana Mayor Laurel Prussing, said he expects the pool will attract "some pretty fierce bidding among energy giants." It should also erase a premium that electric suppliers might place on Urbana because of its unique population.
"Urbana's customer profile is less than ideal," Monson said. "Two-thirds of our population live in apartments, and electric companies like people to live in mansions and use a lot of electricity."
The bidding process is one of the next steps in the program, which authorizes city officials to shop for better electric rates on residents' behalf.
Whatever the final price, Good Energy will add five-hundreths of a cent per kilowatt hour as compensation for itself and one-tenth of a cent for the city. Monson estimates the fees could generate $150,000 for the consultant and $300,000 for the city during the term of a two-year contract.
Joining the bidding pool does not eliminate the city's other options. The contract with Good Energy allows the city to walk away if officials think soliciting bids on their own can get a better price for residents.
"If we don't like the final price, he said we can cancel the contract with no financial penalty," Monson said. "We can walk away."
Some council members said they had concerns about "paying a middle man" to solicit bids after city officials spent hours developing a plan and goals for the program. But they said they felt comfortable knowing that the contract with Good Energy still allows the city to achieve most of what it wants to do, including a key goal to purchase 100 percent renewable electricity.
"This almost feels anticlimactic now," said Alderwoman Diane Marlin, D-Ward 7.