2012-82 AUTHORIZING AGGREGATION OF ELECTRIC LOAD AND ADOPTING ELECTRIC AGGREGATION PLAN

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II. HISTORY AND PURPOSE OF MUNICIPAL AGGREGATION Public Act 96-0176 amended the Illinois Power Agency Act (20 ILCS 3855/1-92, "the Act") by adding a new section 1-92. Section 1-92 of the Act defines two types of electricity aggregation programs that may be enacted by municipalities such as the City of Decatur: opt-in aggregation and Opt-out aggregation. Furthermore, the Act authorizes the Corporate Authorities of a municipality to initiate a referendum which, if approved, would authorize such municipality to arrange for the supply of electricity for eligible residential and small commercial retail customers who have not opted out of such a program. Upon approval of such a referendum, the Act further authorizes the Corporate Authorities of a municipality to adopt one or more ordinances to aggregate the electric loads of small commercial and retail customers located within the City and to then solicit bids, select a retail electric supplier, and enter into a service agreement to facilitate the purchase of electricity and related services and equipment on behalf of its eligible customers. The statute is a part of the state's electric deregulation efforts which allow customers access to competitive retail electric markets. In accordance with the Act, in August 2012, the City Council of Decatur passed a resolution authorizing a referendum on the November, 2012 ballot which asked the public for authority to create an Opt-out aggregation program for its residents and small business customers. The City, through an RFQ process, hired the services of a Consultant, Good Energy, to assist with bidding, selecting the electricity supplier and implementing the Opt-out program. Good Energy conducted a public outreach campaign to educate residents and small businesses about the Municipal Electric Aggregation Program. Outreach efforts included public meetings, press releases, news articles in local news papers and appearances on popular local radio shows. Municipal aggregation, the combining of multiple retail electric loads by the municipality, provides the means through which municipal residential and small commercial retail customers may obtain economic benefits of Illinois' competitive retail electric market. The City will act as a purchasing agent for the Aggregation Group, as provided in the Illinois statutes and the rules established by the applicable governmental agencies, to solicit bids for the purchase of that electricity. Decatur's program will solicit bids for both a lowest rate alternative as well as an alternative for a cleaner, greener supply of electric power. With an estimate of 36,000 eligible electric accounts in the City, the Aggregation has the potential to attract lower rates than the current default tariffed service rate, while also acquiring a cleaner power supply. Decatur's program not only provides these services, but provides the bargaining power achieved through the size of the Aggregation. The Program is designed to reduce the amount its members pay for electric energy power supply and gain other favorable terms of service. The City of Decatur does not own electric generation assets and will not purchase and resell electricity, but represents consumer interests as a governmental aggregator to set the terms for electricity supply and service from competing ARES licensed with the State. Through a competitive bid process operated and managed by Consultant, the City will enter into a contract with an ARES for full-requirements retail electricity supply service. The contract is expected to be for a fixed price for a specified term. The City may contract with one or more ARES if necessary to meet the needs of participating residents and small businesses. The ARES shall provide accurate and understandable pricing, ancillary services and an opt-out notification plan. Page 5 of 21