Wednesday, Jul 23, 2014
Changing Rates Raise New Electrical Aggregation Questions
WSIL -- Good news for consumers. Power company Ameren plans to drop its electric rates twice by the end of the year. However, the move also raises new questions. Many communities now have different power supplies through electrical aggregation.
Cities, towns, and counties agree to a rate for the length of their contract. So far, that's meant savings. Some places in Illinois are now putting their electric aggregation on hold until they see how the market play outs.
Electrical aggregation opened up a new force in the Illinois power market. Du Quoin and Pinckneyville were some of the first communities in the region to sign up for the plan.
"Our contracted rate was about 15-percent below what we were paying," said Du Quoin Mayor Rex Duncan.
Duncan has been pleased with the switch from Ameren to Homefield Energy. More than 90 percent of residents chose to stick with that option.
You can view community rates from Homefield Energy here.
"When you're comparing whether you're paying 4.8 cents or 4.2 cents per kilowatt hour doesn't seem like a big deal," said Duncan. "But it helps."
Duncan isn't worried about a proposal that has Ameren dropping its rates later this year.
"I'm trying to see a down side to it right now," said Duncan. "And I don't."
The city's contract shifts back to Ameren if its supply prices are cheaper.
"It's nice to have the protection of the default back to Ameren," said Duncan.
That's a protection not every community wrote into their agreement. Champaign is now putting its next contract on hold because the rate could be higher. Other towns, like Urbana, are giving residents a chance to drop out.
Most southern Illinois contracts are like Du Quoin and include a default clause. A spokesperson for Select Energy, which handled most of the plans, doesn't believe Ameren rates will beat their negotiated prices..
No matter the proposed prices, Duncan is confident aggregation was a good step.
"Those options are ours," said Duncan. "We can do what we think is best for the people in Du Quoin and the people in this larger aggregation area."
The Citizens Utility Board believes downstate residents won't be seeing as big of savings with electrical aggregation in the future. That's because Ameren is no longer tied to contracts that drove up their rates. It's helped to make the market more even.
You can view electrical aggregation tips from the Citizens Utility Board here.
Energy consumers near Chicago are facing a different problem. Commonwealth Edison could be raising their rates by 38 percent, and many people are trying to switch to different suppliers.
Wind: 17 MPH
Humidity: 83 %