With three public hearings and unanimous approval by the City Council on April 10, the City of Evanston is on the fast track to electricity aggregation.
In the March 20 election, voters approved a referendum that would authorize the City to act as an aggregator – somewhat like a purchasing agent – to purchase electricity from an alternative retail electricity supplier (ARES) for residents and small businesses that are current ComEd customers.
The process is called community choice electricity aggregation. Illinois state law provides guidelines for a plan of operation and governance (POG), and the City’s proposed POG was developed by City staff and the City’s Utilities Commission in compliance with the state statute.
The City’s POG outlines bidding and contract procedures, ways to determine the eligible customer pool, procedures for handling customer complaints and for dispute resolution, opt-out procedures, and the mechanics of moving out of the City or relocating within Evanston, among other matters.
The Power Mix and the Savings
The City’s program recommends that prices be requested for three separate energy supply “mixes”: the lowest-price mix, 75 percent-supported with renewable-energy credits (RECs) and 100 percent REC-supported.
Once electricity is in the delivery lines, its source is not discernible, so aggregators desiring renewable energy receive the renewable-energy credits. (See sidebar.) Examples of sources of RECs are hydroelectric, wind, solar and biomass.
After the priceis determined, eligible residents will have the opportunity to opt out of the pool. Residents who are in the pool could see savings of up to 25 percent on the “supply side,” or purchase portion, of their electric bill and about a 10 percent overall saving, said Catherine Hurley, the City’s sustainability coordinator.
Because the pool is only for the purchase of electricity, other parts of the bill from ComEd will be the same as for other ComEd customers, she said – taxes, delivery, etc.
Once the City has outlined the price it deems acceptable, it will act quickly. “When the City gets the price, we have to act within 24 hours – execute [the contract] the next day,” said Dave Stoneback, director of utilities.
After the price has been set, eligible customers will receive notice of the price and will have the chance to opt out of the program at no added cost.
“There will be no fee for opting out or for relocating within the City,” said Mr. Stoneback. He also said that “at this point in time” the City is not considering charging an administrative fee. Should other costs arise, the City will ask the supplier to absorb them, according to the POG.
Only Evanston residents and small businesses that are ComEd customers at present will be eligible to enter the pool.
At the April 2 public hearing, Mr. Stoneback said those who are now part of an aggregation with an alternate energy supplier will not be eligible. Some faith-based congregations and small businesses are already part of an aggregate purchasing agreement, said Sue Carlson.
Mr. Stoneback said those residents should not break their contracts. While they might be able to join the pool at a later time, he said, the pricing for members in the original pool could not be guaranteed.
Most of the speakers at the April 3 public hearing said they supported purchasing 100 percent REC-backed electricity.
Jeff Smith said he “favors 100 percent renewable energy” and said he felt that using the renewable-energy credits would increase the demand for renewable energy.
Phyllis Bird said she supported 100 percent renewable energy “because I refuse to believe that Oak Park is more committed [to sustainability] than we are. There is also a moral issue – the health and future of the planet. The cost of our current energy is borne by those who live under those power lines and those smokestacks.”
Carl Bova said he was for “practical sustainability.” While there may be merit in pursuing 100 percent renewable energy credits, he said, residents on fixed incomes may not be able to afford that price. “We owe it to them to find the lowest bid – a marginal price for renewable energy is about all [most Evanstonians] will accept.”
Renewable Energy CreditsAccording to the U.S. Environmental Protection Agency, a renewable-energy credit (REC) is one of the two products of a “”grid-tied, renewable-based electricity generator.”” The other product is the electricity itself. The RECs can be sold separately or with the electricity itself. The electricity generator (a wind-farm, for example) receives one REC for every megawatt hour (1,000 kilowatt hours) of electricity generated. Since electrons from all generation sources are indistinguishable, it is impossible to track the physical electrons from a specific point of generation to a specific point of use. Thus the REC, not the electricity, “”conveys the attributes and benefits of the renewable electricity,”” according to the EPA.
RECs benefit the environment, according to the EPA, because they reduce the “”need for fossil fuel-based generation sources to meet consumer demand.””