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

Home Browse Search

Opt-Out Referendum "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 and return to the default supplier or choose another alternate supplier. Such an effort has to be approved by voters as a referendum. Opt-out programs typically see participation around 90% of eligible participants. Residents and small businesses that are under supply contracts with other alternate suppliers at the time of the aggregation are not eligible, but may become eligible after their contracts expire. Alternately, "opt-in" aggregation programs, which do not require a referendum, have traditionally seen low participation rates (roughly 10%) and, therefore, large-scale savings and environmental benefits are not achieved. Benefits of Aggregation Municipal aggregation can be viewed as a package by which numerous goals can be met. These goals can include saving participants money on their energy bills, increasing the use of renewable energy and reducing greenhouse gas emissions. While saving money is typically the chief reason behind undertaking aggregation, the ability of such programs to meet environmental goals is substantial. For example, the Sustainable Decatur plan aims for 25% of all energy to come from renewable energy sources by the year 2030. Residential and small commercial users account for 28% of all the electricity consumed by the community here in Decatur. Incorporating green power into the supply, through the purchase of bundled renewable energy credits (RECs), the proposed aggregation process has the potential to meet this goal instantaneously while providing savings to the residents. The most significant savings under municipal aggregation would be during the first year or so of the program. This situation is due to the default rate for electricity from Ameren being priced under older supply contracts, which will be expiring in 2012 and 2013. Safeguards would be built into the supply contract so that the aggregation rate would never be greater than Ameren's default rate, minimizing the risk to those that participate in aggregation. STAFF REFERENCE: Additional questions can be forwarded to Vasudha Pinnamaraju, AICP at(217) 424-2778 or vpinnamaraju@decaturil.gov. BUDGET & TIME IMPLICATIONS: The consultant would be paid by the selected vendor if the process moves forward or would bear the cost and risk of a campaign if the referendum were to fail. The City would have no financial obligations as part of the process. An ordinance must be signed to put the referendum on the ballot and filed with the county on or before August 20 2012.