R2012-156 AUTHORIZING AGREEMENT GOOD ENERGY L.P.

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DEVELOPMENT SERVICES MEMORANDUM No. 12-41 August 20, 2012 TO: Honorable Mayor Michael T. McElroy and City Council FROM: Ryan P. McCrady, City Manager Billy Tyus, Assistant City Manager Vasudha Pinnamaraju, AICP, Environmental Planner SUBJECT: Municipal Electric Aggregation Consulting Services Agreement Approval. RECOMMENDATION: Staff recommends approval of Consulting Services Agreement with Good Energy, L.P. for Municipal Electric Aggregation BACKGROUND: On Monday, June 4th, during study session the Decatur City Council informally directed City staff to pursue the issuance of an RFP to bring in a consultant to lead the municipal aggregation process. Municipal aggregation allows a municipality to "group" the electric accounts of local residents and small businesses which could lead to lower rates. "Opt- out" aggregation means that all eligible residential and small business electric accounts become part of the aggregated program unless they elect to opt-out. The question of whether to move forward with opt-out aggregation will be considered by voters via referendum on November 6, 2012. Power customers will continue to receive one bill from Ameren if voters decide to support the referendum. While each of the eight consultants that submitted proposals to the City were seemingly qualified, we believe that Good Energy will be able to reap the lowest rates for local residents, in part, due to the company's proven ability to pool a large number of customers in Central Illinois. During the spring of 2012, Good Energy was able to group and bid the accounts of 51 Central and Southern Illinois communities totaling more than 200,000 residential and small commercial electricity customers. As a result, they were not only able to secure a very low price of$0.04 per kWh but also negotiate stringent contact terms with the supplier that included a "Price Match" guarantee. With Price Match, the selected supplier is given a chance to match Ameren's default price should it fall below the aggregation price or have the resident go back to Ameren without penalty. It is anticipated that City of Decatur residents would be grouped and bid with an additional 200,000 residential and small commercial electricity accounts if the November referendum passes. Illinois governmental units that have utilized the services of Good Energy include, Peoria, Peoria County, Glen Carbon, Urbana, Alton and Aurora, among others. STAFF REFERENCE: Additional questions can be forwarded to Vasudha Pinnamaraju, AICP at (217)424-2778 or vpinnamaraju@decaturil.gov. BUDGET & TIME IMPLICATIONS: Good Energy would be paid $0.00075/kWh by the selected vendor if the process moves forward. If the referendum fails Good Energy would bear the cost of the campaign. The City would have no financial obligations as part of the process. ti