Aldermen keep options open on power aggregation

Steve Perkins
Evanston aldermen voted Monday to keep their options open in negotiating for electric aggregation pricing, despite pressure from environmental activists to commit to buying 100 percent renewable energy.
During public comment, Steve Perkins of the Interreligious Sustainability Council showed a letter from 20 local religious leaders supporting the all-renewable plan.
"We call upon the Evanston City Council to help wean Evanston from electricity generated by fossil fuels in favor of 100 percent sustainable, healthy energy from sources like wind and solar," the letter read in part.

Eleanor Revelle.
And  Eleanor Revelle, of 2815 Lakeside Court, said coal-fired power plants are a major contributor to pollution.
When it came time to vote, Alderman Melissa Wynne, 3rd Ward, suggested that instead of seeking pricing for several different levels of renewable energy, the city just ask for quotes from suppliers for 100 percent renewable.
But she was persuaded to withdraw that motion after Utilities Director Dave Stoneback suggested that tipping the city's had about which option it favored might result in not getting the best pricing from the suppliers.
The city's utility commission has recommended opting for at least 75 percent renewable energy, and considering 100 percent renewable if the extra cost is relatively small.
Preliminary price estimates suggest that the municipal electric aggregation program might cut the electric bill for an average consumer by as much as $25 a month, with savings shrinking by only about $1 for all renewable energy. But city officials have cautioned that the electricity prices are volatile, and the actual savings the city achieves may not be that large.
The city next will hold a series of hearings on the electric aggregation program beginning with one at 7 p.m. April 3 at the Civic Center. The City Council then is scheduled to give final approval to the plan at its meeting April 10.
After that the city will seek bids from power suppliers, with the city manager authorized to sign a contract with the provider that provides the best pricing option.
The new supplier would become the default choice for residential and small business electric customers in the city, but individual customers could still opt to choose a different supplier.
Update 11:30 a.m.3/28/11: Some other communities are already locking in deals with alternative suppliers. Details from Crain's Chicago Business.



Factors in choosing electrical supplier

Price should not be the only factor in choosing which electrical provider to go with. There are indirect costs associated with these choices, not just the up front price tag.
1) $25/month may be an important savings some residents. But if we can opt to hold prices the same while shifting from fossil fuels to renewable sources, that also has a significant value, both environmental and financial. In the long run, increasing demand for renewable sources will bring their price down. And continuing to rely on fossil fuels as they become more scarce will make them cost more, not to mention the indirect $ (& other) cost of their  enviromental consequences.
2) Whatever the source of energy or the price, it is crucial that the energy supplier we choose be able to provide RELIABLE power and customer service. That has been a big problem with ComEd. Anyone remember the extended power outages last summer? My block had several. Major inconveniences and costs in spoiled food. 
3) Since ComEd still owns the actual power lines, the city should leverage our consumer choice for electricity to make ComEd commit to investing in needed upgrades to their power grid so we are less susceptible to outages. e.g., Replacing ancient lines, running some lines underground (maybe the major arteries, so large sections of town can't be blacked out by a single fallen tree), and changing the oldest transformers that are likely to blow soon before they actually do, so residents aren't saddled with preventable inconveniences and the huge costs of  spoiled food every time that happens.

Supply versus delivery

"Whatever the source of energy or the price, it is crucial that the energy supplier we choose be able to provide RELIABLE power and customer service. That has been a big problem with ComEd. Anyone remember the extended power outages last summer?"
The outages had to do with transmission, not generation.  Since ComEd will continue to provide transmission, the city's choice of electrical supplier will have no effect on outages.  If the selected supplier becomes unable to generate power, they can just buy power from ComEd and resell it to us, so they will be no less reliable than ComEd.  In practice, the company which is selected to provide the power to Evanston will probably be a middle man that buys power from third parties, and owns no generating capacity.
"the city should leverage our consumer choice for electricity to make ComEd commit to investing in needed upgrades"
From what I have heard of ComEd, they will just opt to lose the business rather than agree to perform upgrades.

Power Choice

We don't buy our power from ComEd. We buy it from Exelon which was severed from ComEd several years ago. ComEd delivers our electric power and bills us for the electric supplier. That process will not change.
Exelon made some bad choices a couple of years ago by locking themselves into some long range contracts. Since then, the cost of power has declined and renewable energy companies have received hundreds of billions in federal subsidies that allow them to compete with traditional power companies. We are already paying for renewable power through taxes and China loans.
My understanding is that Exelon's long term contracts will end this summer and they will be able to lower their power costs and be able to compete on equal footing. I imagine that some of the customers that they have lost will change back to them, maybe.
Everybody must be aware that if renewable energy prices rise because of partial or total withdrawal of federal subsidies, the cost will go up to customers.
Citizens can opt out to another power supplier at any time but will the city be able to opt out. If the city is locked in to a long term contract, the city will pass the increased costs to Evanston taxpayers.
This is a possibility.
Also, it is the city council's duty to select the best plan possible and not just cater to special interest groups who might not care about cost.

You're correct

You're correct about our not purchasing from Com Ed.  But they are back in the game as a supplier through the alternative Constellation Energy.  The rates we have been paying have been contracted and negotiated by a govt. group called Illinois Power Agency. 
IPA negotiations and contracts are an example of how we consumers can end up paying much more than current market rates.  And lets face it, IPA has a lot more purchasing clout than little old Evanston, yet we still are overpaying.  (I ordered a different meter and have been on real time spot market pricing, better than default rates or rates of any reseller)
Those contracts get renegotiated in June of 2013, and it is now unknown where the "default" rates will end up at.  In the March 26 issue of Crains, Torsten Clausen, director of the Illinois Commerce Commission said "beating the utility rate is the easy part right now," "it remains to be seen how competitive these suppliers will be in the future." 
IMO, Evanston should have two contract options, one for those who wish to "opt in" and pay the 10% premium for "all" green energy, another for those of us who simply want lower rates.  We shouldn't be forced into a contract that we must then proactively "opt out" of just to meet the desires of those who are eager to spend everyone else's money as they feel appropriate.  
I hope, and believe the City will take care in these negotiations, but I'm also wary.  e.g.  a few years ago they turned all commercial scavenger service into one city wide contract to "save" money.  Slightly OK for one or two years, since then I have been paying way above the rates I could have contracted out on my own, not to mention the "fee" the City now adds onto my bill every month for the privledge of overpaying.
There is nuance here, as Mark Pruitt, former director of the Illinois Power Agency said, "This isn't a no brainer and a you can't lose" proposition.  Suburbs that buy in bulk from Com Ed competitors "are going to have to address this again, and again, and again.