2012-50 INITIATING SUBMISSION TO VOTERS OF THE PUBLIC QUESTION OF WHETHER TO AUTHORIZE THE CITY TO ARRANGE FOR THE SUPPLY OF ELECTRICITY

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DEVELOPMENT SERVICES MEMORANDUM No. 12-38 July 30, 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: Ordinance to hold a referendum on Municipal Electric Aggregation in the City of Decatur. RECOMMENDATION: Staff recommends approval of the submission to the electors of the City of Decatur the question of whether the City should arrange for the supply of electricity for its residential and small commercial retail customers who elect not to opt out of such a program. BACKGROUND: State law (Illinois Power Agency Act, 20 ILCS 3855/1-92) allows local governments to aggregate the electric accounts from residences and small businesses in order to receive bids from alternate 'retail electric suppliers (ARES). Aggregation has the potential to save consumers money and, if desired, to increase the use of renewable energy. Several local governments in Illinois aggregated residential and small business electric accounts earlier this year and reports indicate that some residents have started to see a savings of 25% - 40% per month. "Opt-out" municipal electric aggregation must be approved by voters via a referendum, and this ordinance would allow staff to move forward with placing the question of aggregation on the Nov. 6, 2012 ballot. On Monday, June 4th, during the study session City Council indicated its support to place municipal electrical aggregation before voters and informally directed City staff to pursue the issuance of an RFP to bring in a consultant to lead the process and placing a referendum for electric aggregation in the ballot. The City recently issued a request for qualifications for a consultant to oversee the aggregation process. Plans are to present a recommendation for Council consideration at the meeting of Monday, Aug. 6. Municipal Electric Aggregation Municipal aggregation is a program that allows local governments the option to aggregate, residential and small commercial retail electric accounts and seek bids for a cheaper, and possibly cleaner, source of power. Municipal aggregation allows ARES to acquire a large number of customers without many of the anticipated marketing costs, thereby allowing them to reduce their pricing accordingly.