Mt. Vernon Register-News

April 11, 2012

Information presented about electricity plan

Plan would allow residents and small businesses to purchase electricity through a broker

By TESA CULLI
tesa.culli@register-news.com

MT. VERNON — — City officials are being asked to move forward with a plan which would allow residents and small business to purchase electricity through a broker.

Representatives from the Southern Illinois Municipal Electric Company, a broker, presented information to the city council on Monday. According to Stephen Thayer, president of the Carbondale-based company, the General Assembly passed legislation in 2010 which allows municipalities to take bids to secure electricity for residents — either through a broker or on its own — in order to save on electric bills for the residents. Thayer said when municipalities take the steps outlined in the legislation, residents see between 10 and 30 percent savings on electric bills.

“Aside from the 10 to 30 percent reduction in pay rates, there are no change in billing or service,” Thayer said. “They still receive a single monthly bill from Ameren, which includes the new supply rate.”

The electric aggregation, if pursued, would only affect Ameren customers. Those who receive power from Tri-County Electric Cooperative would not be able to participate in the program, if the council were to move forward.

“Why pool together for electricity?” Thayer asked. “With 5,000 to 6,000 households, all going out to bid at once instead of answering mailers individually, there is savings. ... It’s a nice option to have.”

Thayer said his fee is paid by the lowest bidder for supplying energy, with no cost to the city or residents. However, members of the council said they want more information before making any decisions on the process. Some of the questions included who would be responsible for electrical shortages in the grid and any subsequent penalties, and how SIMEC payments would affect the overall price of electricity if aggregation moved forward.

Thayer said for the process to move forward, the city would have to put a referendum on the ballot which voters would have to approve.

“If approved and some residents don’t want to be a part of the pool, they can opt out and continue with their service as they have it,” Thayer explained. “If, after they are part of the pool and have missed the 90 days to opt out, they can leave without a termination fee as well.”

Thayer said although many cities in the state have gone to electrical aggregation, there are none which have gotten to the point of entering into a contract with an electric provider in Southern Illinois. During the March 20 general primary election, the city of DuQuoin approved the referendum to move forward, but has not found a provider at this time, Thayer said.

More information is expected to be delivered to the council, which will continue to investigate the issue.