DANVILLE — The Vermilion County Board will make a final decision Tuesday night (June 12) whether to bypass seeking bids in choosing an alternative electric supplier that would negotiate a lower bulk rate for electricity on behalf of Ameren customers in the county.
The board will consider an agreement with Integrys Energy Services, a Wisconsin-based company, rather than seeking bids from the various electric supply companies that are competing for business in Illinois. The state's electric market was deregulated by the Illinois General Assembly in the late 1990s, allowing commercial and residential customers to buy their electricity from various suppliers of their choice.
The county board also will be voting at its 6 p.m. meeting in the Vermilion County Courthouse Annex, 6 N. Vermilion St., Danville, on whether to ask voters in November for the authority to sell the county-owned Vermilion Manor Nursing Home on Catlin-Tilton Road just west of Tilton. The long-term care facility has been struggling financially since the state's Medicaid reimbursement cycle has fallen further behind. The county board's nursing home committee unanimously recommended last month putting the question on the ballot.
With deregulation, Illinois customers can sign up, on an individual basis, with a supplier of their choosing. But in 2010, the Illinois Legislature gave local governments, including counties and municipalities, the ability to contract with an electric supplier that pools residents and small commercial customers and use that purchase power to negotiate a bulk rate that's lower than what a resident or commercial customer could get on an individual basis. But voters must give their approval in a referendum before an electric supplier can contract with a municipality or county, which receive some revenue from the electric suppliers as part of the agreements. By law, all customers must be given the opportunity to opt out any alternative electric program.
Municipalities across the state have been contracting this year with electric suppliers and some have decided to choose a company through a bidding process, based on which company can get the lowest rate, including Champaign and Urbana. Integrys won Champaign's bid with a two-year contract, locking in a price of 4.15 cents per kilowatt hour for electricity, which compares with Ameren's current rate of 5.7 cents per kilowatt hour. And Homefield Energy won Urbana's bidding process and will supply 100 percent renewable electricity to Urbana residents at a rate of 4.08 cents per kilowatt-hour, about 35 percent less than what customers would pay without the program.
Other Illinois cities have followed the route Vermilion County will be considering tonight and have bypassed the bidding process.
Two towns in Illinois that went that route earlier this year are Canton and Ottawa. Canton just signed a two-year agreement with Integrys at a rate of 4.65 cents per kilowatt hour, and Ottawa signed a two-year contract at 4.39 cents per kilowatt hour. Both rates are higher than the Integrys rate of 4.15 cents per kilowatt hour that Champaign received in a bidding process earlier this year, and both are also higher than the rate Urbana got.
Alaina Rivers, deputy city clerk in Ottawa, said the city chose to go with Integrys up front, because the company could sign up residents more quickly and get them some savings sooner.
The upfront agreement that Vermilion County is considering, like Canton's and Ottawa's, allows Integrys immediately to recruit Ameren customers into its program, prior to voter approval, and providing a lower rate than Ameren.
In return, Integrys agrees to cover the county's costs of its referendum this fall as well as the costs of promoting the referendum in which voters will be asked if an alternative electric supply company can negotiate a long-term electricity rate on behalf of all eligible Ameren customers in the county.
If voters agree, Integrys would then pool all the eligible Ameren customers, residential and small commercial accounts, and negotiate a bulk rate on their behalf. Any customer who signed up in the summer would automatically be switched to the lower, newly negotiated rate.
County board member John Alexander, R-District 6, questioned during the county board's executive committee meeting earlier this month the decision not to seek bids. But Alexander said on Monday that he's now comfortable with not seeking bids. He said there is some advantage to bidding, but he believes Integrys helping the county to promote the referendum offsets the potential savings that could be achieved, waiting until after the election to bid.
"And this is not forever," he said. "So once we have a contract with Integrys, it could be bid at a future date when the contract expires. The assistance to be had from Integrys making sure the vote is successful, and helping us educate the public, is a tremendous benefit I believe."