URBANA— Next month, Urbana residents will automatically start receiving energy from a new supplier, unless they’ve already opted out.
The city entered into an agreement with the supplier, Direct Energy, through an electric aggregation program. The program allows the city to pool residential and commercial electricity accounts to negotiate a bulk rate.
“Municipal aggregation takes a Costco [Wholesale] approach to electricity,” Citizens Utility Board spokesperson Jim Chilsen said. “Usually, you get a better price per unit when you buy in bulk. That’s the same idea with municipal aggregation.”
Citizens Utility Board is a nonprofit consumer protection organization that fights utility rate hikes and promotes clean energy.
Opting into the electric aggregation program means residents’ electricity bills won’t fluctuate with changing energy prices, Chilsen said, but it doesn’t necessarily mean their bills will be lower.
“Municipal aggregation cannot guarantee savings,” he added.
The yearlong rate the city agreed to is 12 cents per kilowatt hour according to Urbana Sustainability and Resilience Officer Scott Tess. That could reduce some utility costs for Ameren customers, but the full difference isn’t clear yet, he said.
“The Ameren default electricity supply rate for the timeframe that our contract starts and finishes is not published yet.”
Ameren’s default rate, which is made up of big blocks of electricity purchased by the state at no markup, will be available later this month, Tess said.
“We expect Ameren’s price to go up on June 1,” Chilsen said, “but we don’t exactly know.”
Last summer, Ameren’s rate was the same as Urbana’s negotiated rate at 12 cents per kilowatt hour, which is historically when energy prices are highest, but the rate was lower at 8 cents the rest of the year. Chilsen said it’s possible this year’s rates will follow that same pattern.
“Ameren Illinois does not have insight into what the new electric supply rate will be in June, since the pricing is based on results from the regional MISO [Midcontinent Independent System Operator] auction, which are not yet available,” an Ameren spokesperson said in a statement. “We will be paying close attention to the results, which are expected later this month, and will communicate with customers directly about new prices.”
Tess said Urbana will automatically pull residents into the aggregation program if they take no action, but they can opt out if they change their mind once Ameren’s rate is published. Residents can also purchase electricity from another supplier instead of going back to the default rate.
Tess explained they can opt out of the aggregation program at any time, but once residents are back on the default rate, they are locked in for the rest of the year after two billing cycles.
He also acknowledged that there are a few instances in which residents should absolutely opt out of the aggregation program such as households with solar panels that are being credited for excess electricity sent to the grid.
“If you change suppliers, those credits usually don’t transfer from one supplier to the next,” Tess said, “so you’ll lose them.”
Residents who are on Power Smart Pricing also can’t join the aggregation program.
Tess said that for anyone who opts in to the program, their bill will still be issued by Ameren. The only difference is that Direct Energy will be listed as the supplier and the aggregation price will be used to calculate the bill.