Ameren subsidiary supplies electricity at lower rates in rural areas
URBANA — Ameren's residential and small business customers in unincorporated Champaign County stand to save approximately $20 a month on their electric bills under a 17-month contract awarded this week to Homefield Energy.
Ironically, Homefield Energy is a subsidiary of Ameren Corp. It works with municipalities to offer discounted, aggregated electricity.
In a bid process covering 55 central and southern Illinois communities, including unincorporated Champaign County, Mahomet, Savoy, Ogden, Tuscola, Arcola, Camargo, Cerro Gordo, Charleston, Decatur, Mattoon and Normal, Homefield Energy was awarded a contract to supply electricity to as many as 230,000 households.
Homefield's rate varies, depending on whether a community wanted renewable energy credits and whether it would levy a municipal fee. Its base rate is 3.9 cents per kilowatt hour. Ameren's current base rate is 5.6 cents per kilowatt hour, although that is expected to drop in June when several long-term power purchase contracts expire.
The approximately 13,000 to 15,000 Ameren customers in unincorporated Champaign County who opt to join Homefield will pay 3.9999 cents per kilowatt hour for their electricity. The county board earlier had agreed to pay a premium for a 100 percent renewable electric production option. That option includes both power from renewable energy sources, such as wind turbines, plus renewable energy certificates that are purchased from "green" energy generators to finance their expansion.
The new rate, according to Good Energy, a consulting group that ran Tuesday's bid awarding, will for now save consumers approximately 25 to 30 percent on their monthly electricity bills.
"These are really low rates," said Champaign County Administrator Deb Busey, who attended the bid award and signed off on the county's contract.
The 3.999-cent rate to be paid by those living in unincorporated Champaign County will be slightly less than the rates the city of Urbana negotiated earlier this year with Homefield (4.055 cents per kwh), and the rate Champaign negotiated (4.15 cents per kwh) with Integrys Energy Services.
"This likely is the largest residential purchasing group in the country and a testimonial to buying in bulk," said Charles de Casteja, the managing partner of Good Energy.
And if Ameren's rates drop below Homefield Energy's rates next summer, de Casteja said a "price match" provision in the contract requires Homefield to either match Ameren's rate or return all customers to Ameren.
"I think it's unlikely that the Ameren rates would reset lower, based on how power has been purchased in Illinois," he said.
Ameren customers in the areas covered by Tuesday's award will receive notifications in the mail this month about the potential switch to Homefield.
"Every eligible household or business will receive a letter explaining this to them and telling them that if they do not want to be converted to this rate they can opt out," said Busey. "It will explain to them what they need to do to opt out."
The new rates will go into effect with the bill that customers receive in February, she said.
Jim Chilsen, a spokesman for the Citizens Utility Board, advised consumers in the affected areas to watch what happens to Ameren's base rate next summer.
"There's expected to be some movement downward but we don't know by how much," he said. "Electricity prices, because they have been locked into those higher-priced contracts, are expected to drop significantly but we don't know how much. Ameren and Commonwealth Edison have been locked into those contracts for several years. They were decent prices at the time when they locked them in, but then the economy began to struggle and natural gas prices dropped, that has affected the electricity prices and made the prices go lower than what those contracts were set for."
Rates for other area communities that approved aggregation contracts this week are, according to the Illinois Commerce Commission: Mahomet and Mattoon, 3.909 cents per kwh; Charleston, 3.999 cents per kwh; Savoy, Ogden, Camargo, Decatur, Normal and Cerro Gordo, 4.009 cents per kwh. Rates for Arcola and Tuscola have not been posted on the ICC website.