The cities of Champaign and Urbana will be flipping the switch on most of their residents this month as they move them over to two new electricity suppliers: Integrys Energy in Champaign and Homefield Energy in Urbana.
Most people won't notice a difference, except for the lower bottom line on the monthly bills they get from Ameren Illinois. Both cities are estimating that customers will save well over $100 annually — maybe even closer to $200 — on their electric bills with the new rates.
But the electricity itself will be somewhat different. It'll still power your TVs, computers and refrigerators just the same. But, theoretically, the energy residents will be using will have originated from a 100 percent renewable source, such as wind, solar or hydroelectric energy.
The journey the electricity actually takes to your home is a different story.
1. Power generation
The renewable energy Champaign-Urbana has purchased is more of a concept than a reality. Somewhere — probably multiple places — power plants are generating enough renewable energy via wind or solar power to keep the lights on in most Champaign-Urbana homes.
But electrons are the same no matter where they come from, and it's impossible to pinpoint where the electricity flowing through your computer screen or hair dryer started. After generation, all the electricity enters the same grid — whether it was created by wind, solar, coal or nuclear generators doesn't matter.
Under the contracts they signed with the cities, the new electric suppliers buy enough "renewable energy credits" on the market to account for all the electricity needs of their customers in Champaign-Urbana. While there's no way of telling where the electricity that you're using came from, rest assured that your wind power is flowing somewhere.
This is what officials are talking about when they mention a "retail electric supplier." Before this month, customers were paying around 6 cents per kilowatt hour for this step in the process. After the switch to the new supplier, Urbana customers will pay 4.055 cents and Champaign customers will pay 4.149 cents.
2. Amped up as journey begins
After the electricity is created by the retail electric supplier, it is moved to a substation outside the power plant, and the voltage is increased to prepare it for transmission, said Ameren spokesperson Leigh Morris.
This is where Ameren Illinois takes over. The electricity is transported over high-voltage lines — the electricity running here is at either 138,000 or 345,000 volts — to a "bulk substation," where the voltage is lowered to below 100,000 volts. From there, the electricity is moved out at 34,500 volts on sub-transmission lines.
3. Tamed for distribution
The electricity hits another "distribution substation," where the voltage is further reduced. Then it goes out again on normal power lines, the kind you'll see along streets.
4. Transformed and delivered
After one more trip through a transformer, which could be mounted on the electric pole itself this time, the electricity is at a low-enough voltage to enter homes. By the time it gets to your power outlets, it is delivered at 120 or 240 volts. That's the end of the line as far as delivery is concerned, and the whole process is much faster than it took you to read about it.
"The amazing thing about electricity is, the instant it's created, it's also being used," Morris said.
5. Split among many homes
Integrys Energy will be serving about 24,000 accounts in Champaign, according to Integrys spokesman Brian Bowe. Homefield Energy will serve about 15,500 accounts in Urbana, according to spokeswoman Samantha Hager. Across Champaign-Urbana, less than 5 percent of customers decided not to participate in the cities' programs.
So with nearly 40,000 households paying cheaper rates, the bottom line is that municipal aggregation programs are expected to save customers roughly $5 million collectively.
And to put in perspective how much renewable energy that is: Hager says the amount of renewable energy that will be generated to cover just Urbana's 15,500 accounts for the term of the two-year contract is the equivalent of planting 2 million trees or taking 8,379 cars off the road.
There's gotta be a catch, right?
Some of your money will be going to the city, and if you live in Urbana, you'll also be paying a small portion to a consultant.
In Champaign, the city asked Integrys Energy to include $100,000 in extra costs, which if included in the rate customers pay, would have raised the final price by a couple hundredths of a cent per kilowatt hour. That money will cover the city's cost of setting up the program and $70,000 annually in salary and benefits for a new city employee who will administer the program.
In Urbana, customers will pay a few extra hundredths of a cent for new city revenue — $110,000 annually for the two-year contract. Customers will also pay $55,000 annually for two years to Good Energy, a consultant the city hired to manage the bid process, a move which officials believe got customers a lower price.
The renewable energy was a bit more expensive — about 0.06 cents per kilowatt hour in Urbana and 0.08 cents in Champaign over what customers will be paying. The rough estimate is that will be $10 more expensive annually than traditional generation methods.
And as for Integrys Energy and Homefield Energy, which is a subsidiary of Ameren Corporation, the electric suppliers get thousands of new customers.
Residents who were automatically signed up for the program should already have been notified with an "opt-out" letter from the new electric supplier. Customers will get another letter before the changes take effect — some residents may already have been switched over.
In Champaign, some 10,000 customers who did not qualify for automatic enrollment will get an "opt-in" letter. Those who will get the "opt-in" letter include customers that already had an alternative retail electric supplier, those on an hourly-pricing program or customers who get an electric-heating discount from Ameren Illinois. They will be allowed to enroll in the city's program if they find it is beneficial.
Urbana customers who did not receive an "opt-out" letter will also not receive an "opt-in" letter, but they are also eligible to enroll if they find the city program will save money.
The bottom line: Most residents will see electric supply savings on their August bills.