Urbana residents to get opt-out letters on electric rates soon

URBANA — "Opt-out" letters will go in the mail today to nearly 600 residents whose addresses Homefield Energy missed after a glitch in the first mailing. They will have until July 2 to tell the city if they do not want to participate in the municipal electric aggregation program.

Another 3,800 Urbana residences which receive a "space heat discount" from Ameren Illinois should expect to get an opt-out letter, too. Those residents will also have until July 2 to respond, and city officials say they should review their power usage carefully to determine if they should opt-out.

Anyone who receives the letter will be automatically enrolled and needs to do nothing to experience savings on their electric bills in the coming months. Only those who want to drop out need to return the postcard that will be included in the letter.

City officials, in general, do not advise dropping out — many customers would be missing out on more than 30 percent in savings on the electric supply portion of their monthly electric bill when they are switched over to a new electric supplier, Homefield Energy. But time is running short for residents who do not want to participate.

It is a small percentage of people who are choosing not to, said Mike Monson, chief of staff to Urbana Mayor Laurel Prussing. Across the 200,000 households which Homefield Energy will be serving in the Ameren Illinois territory, the "opt-out" rate is around 3 percent.

"It's a pretty low percentage," Monson said.

The "space-heat customers," who heat their homes with electricity and receive a discount, will need to do some math to see if the city program will save them money.

The current default electricity rate for summer is 6.16 cents per kilowatt hour, and the rate will drop to 5.45 cents from October through May, according to the city's website.

Space-heat customers, however, pay 3.18 cents per kilowatt hour for non-summer use above 800 kilowatt hours per month, according to the city. The rate in the city program for the next two years is a flat 4.05 cents per kilowatt hour.

If space-heat customers do not respond to the letter, they will lose their discount from Ameren when they are switched over to Homefield Energy. But unless they use huge amounts of electricity during the fall and winter months, the city program in which they will be automatically enrolled if they do not respond will still benefit their bottom line.

For example, a space-heat resident using 800 kilowatt hours per month most of the year, but 1,200 kilowatt hours per month from December through February, would still see savings with the city's program, even without the discount. That resident could expect to save $67 during the summer months and $79 from October through May.

Unlike Champaign, residents in Urbana who have individually chosen a new retail electric supplier will not receive an "opt-in" letter. They are invited, however, to enroll in the city's program if they cancel their agreements with their current suppliers.

Depending on the contract, those residents typically would have to pay an early termination fee. If that is the case, they will want to examine whether the savings will make up for the termination fee before enrolling in the city's program.

Monson said some residents have started receiving a second letter, which acts as their last chance to opt-out. Most customers who do not respond should start to see the savings on their August bills.

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