 County board members in attendance were Andy Anderson, Kevin
Bateman, Andy Meister, Bill Martin, Pat O'Neill and Jan Schumacher,
all of whom serve on the county's insurance and legislative
committee. Also on hand from the county was board president Bob
Farmer. For the city council, all 10 members were present along
with the city clerk, council secretary, city treasurer and city
attorney.
Speakers for the evening were Mark Pruitt of the Illinois
Community Choice Aggregation Network and Javier Barrios of Good
Energy. Also assisting Barrios was Gary Fogelman.
The format for the evening allowed each presenter to speak 30
minutes, then field questions for 30 minutes. However in both cases,
the presenters said they would prefer to take questions as they
arose.
Mark Pruitt, Illinois Community Choice Aggregation Network
Pruitt was the first presenter of the evening and began by
explaining his organization and its purpose.
ICCAN is not a single entity, but rather a network of companies
formed for the promotion of aggregation in general, not to serve as
consultants. Their goal was to establish best practices in
aggregation.
Pruitt said ICCAN believes that communities ultimately want to be
able to manage aggregation on their own without consultants.
He believes the best approach is for consultants to be involved
in the areas the governing bodies want them to be involved in, and
eventually even step out of the program when city and county
governors feel confident to run it themselves.
He also stressed that the process should be a collaborative
effort, with the consultants doing only what local officials want
them to. He noted that in the work he has done for other
communities, very few ever say, "Just run the whole thing."
The ICCAN network includes members from the Galvin Center for
Electricity Innovation, a research center at the Illinois Institute
of Technology; Intelligent Power Partners, the engineering
component, headed by John Kelly; and LEAN Energy U.S., a nonprofit
headed by Shaun Marshall. Marshall is a former city mayor who has
had extensive experience nationwide working to help put together
statues and language for legislation for aggregation
The final partner in the network is the Power Bureau, Pruitt's
employer. Pruitt is the former director of the Illinois Power
Agency. In that role he worked with power brokers to supply
affordable electricity to the delivery companies such as Ameren and
Commonwealth Edison.
Pruitt said ICCAN works with a small staff and has very low
overhead, which makes their services more affordable.
With the combined entities, Pruitt said ICCAN does know how to do
procurement, knows the policies, understands the engineering and has
the academic recourses to provide the services needed in the process
of aggregation.
Pruitt went through a timeline with the two boards, saying they
needed to get started on several things right away. He cautioned
that with summer coming, prices would be driven upward. In addition,
there will be many communities looking at the same time for better
prices, and it may become overwhelming for the alternate retail
electric suppliers or ARES. This could affect their pricing
structure.
With the March 20 election just around the corner, Pruitt said in
addition to the referendum that needs to be put on the ballot for
voters, the boards should start now looking at prospective bidders.
Pruitt said one big mistake made by a community in northern
Illinois is that they didn't do their search early, and when they
did seek bids, they asked only for pricing. The result was that they
got prices but found in many cases the contracts with the ARES
contained language they couldn't live with. This caused extensive
delays, and even though they passed their referendum in May of 2011,
to date, they still do not have an ARES providing electricity to
their community.
He said this is a prime example of why Lincoln and Logan County
should get started early in selecting their ARES. He said every
month the boards spend getting ready is a lost opportunity for
savings.
Feb. 1, Ameren will be able to release to the city and county a
list of all their customers in the area. This list will be bone
basic, providing only the name and address of the account.
Pruitt said the group could also start looking at possible
vendors. He said there were only four or five vendors in Illinois
that could provide the service to Lincoln and Logan County, and it
was not too early to be contacting them.
He also noted there should be a scoring system of sorts when
looking at an ARES, with 80 percent of the score being based on
their qualifications as a supplier and their ability to serve this
community.
Pruitt said the group might even be able to fully select their
ARES before the referendum is passed.
Then, if and when the referendum passes, Logan County, Lincoln
and the outlying communities will be posed to start sending out
their notifications and could easily by May be moving accounts over
from Ameren to the ARES.
As Pruitt explained this, the question came from Alderman Marty
Neitzel: "What if Ameren is cheaper?"
Pruitt said if Ameren could beat the price of the ARES, then the
county and city do not have to sign the contract with the ARES.
As Pruitt talked about the list of customers the city and county
would receive from Ameren, he explained the first list will be very
basic information. City and county representatives will need to go
through the list and identify the accounts as to where they actually
are in the county geographically. They then return the list to
Ameren.
After the referendum is passed, Ameren will give local
authorities a list with more detail. The revised list should list
the accounts, their usage, and whether or not they are involved in
any special programs such as the Ameren PIPP, or Percentage of
Income Payment Plan, which is administered as a social service
program through LIHEAP.
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Another type of customer who might not be right for a move to an
ARES is all-electric homes. Pruitt said special rates are afforded
to all-electric customers.
Others who might not benefit would be those who have high
electric usage. Ameren offers a reduced rate to customers who use
over 800 kilowatt hours per month. He explained the rate goes down
at 801 kwh. For example, if the customer uses a total of 1,000 kwh,
the average of the two rates may be lower than the ARES can offer in
a flat rate.
Pruitt said going through all these types of customers would be
important because the city and county do not want to enroll
customers who will likely not get a better price than they have with
Ameren.
Pruitt was asked by county board member Andy Anderson if Ameren
was required to give the city and county all the information about
their accounts. Pruitt said they are, once the referendum is passed.
Pruitt said Ameren also has a team of presenters who will come to
public meetings and explain Ameren's role in the delivery of
electricity to the customer. He said they would share with customers
what the service delivery includes, assuring them they are still
responsible for line maintenance and they are the ones to call
during power outages.
Anderson also asked if it would be the role of the consultant to
assist in all these analyses of the accounts.
Pruitt said he felt that it was. He explained it was not in
anyone's best interest to switch customers who could not benefit
from it. He also noted no one wanted to be getting those irate calls
from customers who end up paying more, so it is important to get it
right.
Doing this, he said could be done by attaching information about
a customer's current account with Ameren to notices that will be
mailed out as they prepare for switching accounts. He said another
alternative would be to have a website where customers could log on,
enter their current Ameren bill information and have it compared
with what the ARES would be charging.
Pruitt talked about preparing to sign a contract and was asked by
city attorney Bill Bates if ICCAN would be involved in this. Bates
said he wasn't sure what should be in a proper contract, but Pruitt
said he believed that too was part of his job, to go through the
contract and assist in understanding the terms and making changes as
needed.
Pruitt said, "We won't dictate to you what you have to do, but we
will help you; we'll give you're a draft and help you make it work."
He concluded with, "You drive the bus here, you're going to take the
lumps if it goes wrong, so you should be able to set the terms
here."
As Pruitt's hour drew close to an end, he was asked by Alderwoman
Melody Anderson what ICCAN's fees are and how are they paid.
Pruitt said there are two ways to pay ICCAN. First, he emphasized
that ICCAN will be working for the city and county, not the ARES,
and the best method is to be paid by the local entities. He said
this can be done by ICCAN invoicing Lincoln and Logan County, and
the city and county paying out of their general funds.
Another method would be for ICCAN to hold their billing until all
the switching to the ARES was completed. Then the governing bodies
could build their cost of the consultant into the consumer electric
rate, collect the funds and pay ICCAN.
ICCAN works with a "not to exceed" clause. In other words, the
rate they charge will more than likely be in the area of 15 to 25
cents per megawatt hour of electricity purchased, with a guarantee
the price will not exceed the larger of the two figures.
Bates asked what would happen if no contract was signed with an
ARES.
Pruitt said that is ICCAN's risk in the deal. If they do
everything they can to get a good contract and cannot do it, or if
the referendum fails, then ICCAN's work would have been provided at
no charge.
Snyder asked if there were any ARES that ICCAN had other
relationships with. Pruitt said not in the way Snyder was meaning. ICCAN
has worked with several ARES, so they have business relationships
with them, but they don't take money from any of them. He said he
would provide affidavits to that effect when the city and county
hire his firm.
Finally Pruitt was asked by county board member Andy Anderson
simply, "Why should we hire you?"
Pruitt said: "To make it simple, I believe in the end you'll find
we are at a lower cost. Secondly, I think you'll get more
innovative advice from us. We come to this not from 'we want to be
consultants, we want to make money consulting'; we come to this from
a policy standpoint. Our partners have said 'municipal aggregation
has to work well for its full potential to be realized.'"
He continued by saying ICCAN wants to ensure that aggregation is
successful by establishing best practices that can be used by
everyone. He finished by saying his firm will bring their experience
and perspective to the process so that it will work out well for
Lincoln and Logan County.
[By NILA SMITH]
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