Municipal Electric Aggregation (MEA)
MEA is a new program that allows Illinois municipalities to act on behalf of residents and small businesses to help them reduce their electric bills. It authorizes the City to bundle the electric supply of residents and small businesses, and then seek bids from electric suppliers on the open market for an electric supply rate that is lower than the default rate charged by Ameren. Under MEA, participants receive electricity supply from a new provider, but Ameren continues to act as the electricity delivery company, meaning the only change MEA participants will see is a lower rate under the “electric supply” portion of their monthly Ameren bill. Ameren will continue to send the electric bill and respond to outages, service calls and emergencies.
Benefits of MEA
The primary benefit of MEA is that it allows the City to help residents and small businesses lower their electric bills without requiring them to take action.
MEA Implementation Steps
Outlined below are the implementation steps for MEA and the status of the City’s program.
State statutes require voters to give the City authority to establish and operate a MEA program. At the December 6, 2011, meeting, Council approved CB 2011-236, “An Ordinance Authorizing the Submission of a Public Question to Adopt an “Opt-Out” Program for the Supply of Electricity to Residential and Small Commercial Retail Customers.” This ordinance placed the question of establishing a City MEA program on the March 20 ballot. The March 20 MEA referendum results were 5,229 –yes, and 2,877 – no.
2. Plan of Operation and Governance:
To establish an MEA program, the statute requires the City to prepare a Plan of Operation and Governance. Generally, the Plan outlines how the City intends to operate the MEA program. City staff has prepared the MEA Plan of Operation and Governance. Per the statute, public hearings on the Plan were held at 10 a.m., Tuesday, April 17 and 7 p.m., Thursday, April 19. A copy of the draft Plan was posted on the City’s web site on April 9. The April 24 Council Study Session reviewed the Plan and Council provided input. The Plan was adopted by Council on May 15.
Per the requirements in the Plan of Operation and Governance, the City solicited bids for electricity rates for the City’s MEA program from retail electricity suppliers (RES). The City followed the Request for Qualifications (RFQ) process which consisted of two phases: Phase 1 established a pool of qualified RES vendors; Phase 2 requested from the pool of qualified RES vendors fixed price bids for electricity supply.The City received six responses for Phase 1 of the RFQ process. The responding companies were:
- BlueStar Energy
- Constellation New Energy
- Direct Energy
- FirstEnergy Solutions
- Integrys Energy Services
The City reviewed the RES responses and determined all were qualified to bid on the City’s MEA program.
May 18, 2012, City staff requested electricity bids (Phase 2) from the six RES vendors who had been qualified to bid on the City’s MEA program. Bids were due by 1 p.m., May 22, 2012. The City received bids from all six qualified vendors.
At the May 22, 2012, City Council meeting, Council authorized the City Manager to execute an Aggregation Program Agreement with Integrys Energy Services. The accepted bid from Integrys was for 24 months at a rate of $0.04149 kilowatt hour which includes 100 percent renewable energy.
State law requires all eligible MEA participants be given the opportunity to opt-out of the City’s MEA program. Those opting out of the program would stay on the Ameren default electricity rate or pursue other purchasing options, such as Power Smart Pricing, selection of an alternate retail electricity supplier, or the Chamber of Commerce Co-op for businesses.
Ameren, Integrys, and the City worked together to identify the pool of eligible MEA participants. Integrys mailed the opt-out letter to the eligible participants. Participants were given 14 days to opt-out.
5. Switch Over:
Once the opt-out process was completed and the pool of eligible participants was established, Integrys and the City worked with Ameren to switch eligible participants to the City’s MEA electricity rate.
The City reports $1.6 Million in savings from the start of the program from August 2012 – May 2013
Listed below are the Council actions establishing the City’s MEA program.
- November 22, 2011, Study Session: Council directed staff to put a resolution authorizing the electric aggregation referendum on the December 6, 2011, agenda.
- December 6, 2011 Council Meeting: Council approved CB 2011-236, “An Ordinance Authorizing the Submission of a Public Question to Adopt an “Opt-Out” Program for the Supply of Electricity to Residential and Small Commercial Retail Customers.”
- February 28, 2012, Study Session: Council provided input on aggregation policies and directed staff to develop the Plan of Operation and Governance for the Municipal Electricity Aggregation Program.
- April 17, 2012, Council Meeting: Council adopted an ordinance that amends the City Code to establish the City’s electricity aggregation program.
- April 24, 2012, Study Session: Council provided input on the Plan of Operation and Governance for the City’s Municipal Electricity Aggregation Program.
- May 15, 2012, Council Meeting: Council approved CB 2012-069 that approved the Plan of Operation and Governance for the City’s Municipal Electricity Aggregation Program.
- May 22, 2012, Council Meeting: Council authorized the City Manager to execute an Aggregation Supply Agreement with Integrys Energy Services to provide electricity for the City’s MEA program for 24 months at a fixed rate of $0.0415 per kilowatt hour which includes 100 percent renewable energy.