R2020-143 Resolution Authorizing the Execution of a Service Agreement for Supply of Electricity for Residential and Small Commercial Customers Municipal Aggregration Homefield Energy

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City Manager DATE: 11/5/2020 MEMO: 2020-12 TO: Mayor Julie Moore Wolfe&City Council Members FROM: Scot Wrighton,City Manager Jon Kindseth,Deputy City Manager SUBJECT: Resolution Authorizing a Supply Agreement with HomeField for the Municipal Aggregation Program SUMMARY RECOMMENDATION: Staff recommends the City select HomeField and sign a three-year Agreement. The recommendation is to set the rate for the aggregation for only year one.Years two and three will be set in the future as market rates improve. This approach allows us to maximize the savings(18.8%)to residents and small businesses starting in January 2021. BACKGROUND: The current HomeField Energy supply service agreement commenced in June 2016 and ends December 2020. With the contract term ending the City has focused efforts on updating the program and securing new beneficial rates. CQI Associates was enlisted to help find a qualified energy provider,negotiate new rates,and manage the new program The latest report from Ameren includes 34,889 accounts enrolled in the program The City receives a payment to administer the program based on the kWh consumed by the customers enrolled in the program The payment will continue as part of a new contract beginning December 2020 and is reflected in pricing provided. HomeField,Constellation and Mid America replied to the RFP with detailed qualified bids.HomeField provided the best technical information and lowest price offer. The initial and updated price offer as of September 29,2020 would reduce the cost to residential and small business accounts by an average of$158.00 annually. The City will seek pricing on Monday,October 5th to see if we can get even better pricing,which will become the executable agreement if authorized by Council that same day. PRIOR COUNCIL ACTION: The City Council has been actively providing a municipal aggregation program to our residents and small businesses more many years. The voters granted the City this authority by referendum after the State deregulated our gas and electric utility suppliers. HomeField has been the lowest bidder and the City supplier for the municipal aggregation program since 2013. POTENTIAL OBJECTIONS: Staff is not aware of any objections,as this program will save money for participants. Any resident or small business can opt out at any time at no expense to them. STAFF REFERENCE: If you have any questions you can contact Jon Kindseth,Deputy CM at 450-2323 or jkindseth@decaturil.gov BUDGET/TIME IMPLICATIONS: No direct expense to the City or residents for this program. ATTACHMENTS: Description Type Resolution Authorizing Agreement Ordinance Price Sheet Backup Material