cover
TO: Mayor Thomas J. Weisner
FROM: Brian W. Caputo, Chief Financial Officer/City Treasurer
DATE: May 8, 2014
SUBJECT:
A Resolution Authorizing the Execution of an Agreement for the Provision of Electricity Pursuant to the City of Aurora Electricity Aggregation Program
PURPOSE:
To obtain the City Council's approval of a proposed resolution that would provide for the execution of an agreement to provide electricity to residents and small commercial businesses pursuant to the city's electricity aggregation program.
BACKGROUND:
On March 20, 2012, the electors of the city approved a referendum question concerning the establishment of a municipal electricity aggregation program pursuant to Public Act 96-0176. On June 26, 2012, as required by state law, the City Council approved a plan of operation and governance for the program by the adoption of Ordinance No. O12-047. In May of 2012, the city accepted competitive bids for the provision of electricity to residents and small commercial businesses. The city accepted the bid of First Energy Solutions to provide electricity at a rate of 4.71¢ per kilowatt hours for two years beginning in August 2012. The power supply agreement with First Energy Solutions provided a savings of an estimated $20 million over the agreement's two year term.
DISCUSSION:
The term of the first electricity aggregation power supply agreement will expire in August 2014. We now must accept bids to ascertain whether it is advantageous to the residents and small commercial customers in the community to enter into a new power supply agreement with an independent electricity supplier or return to ComEd as our supplier.
We expect to accept bids from independent electricity suppliers on May 27, 2014. Bids will be solicited for the following general options:
1. Duration:
a. 12 months.
b. 24 months.
c. 30 months.
d. 36 months.
2. Green/Renewable Power:
a. 25%.
b. 50%.
c. 75%.
d. 100%.
e. Illinois vs. out-of-state supply.
3. ComEd rate match.
4. Free customer movement. (This option would permit customers to enter or leave the program at no charge to them individually.)
It may be necessary to convene a special City Council meeting during the afternoon of May 27 in order to make a prompt decision on whether to accept any of the bids received. If the City Council does not make a prompt decision after the bids are received, it is possible that the bidders will include a premium in their bids to hold the prices for a period of time.
IMPACT STATEMENT:
Not applicable.
RECOMMENDATIONS:
That the City Council approve the attached, proposed resolution that will provide for the execution of an agreement to provide electricity to residents and small commercial businesses after August 2014 pursuant to the city's electricity aggregation program.
cc: Alderman O'Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Peters, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing the Execution of an Agreement for the Provision of Electricity Pursuant to the City of Aurora Electricity Aggregation Program.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, Section 1-92 of the Illinois Power Agency Act (the "Act"), 20 ILCS 3855/1-92, permits a municipality, if authorized by referendum, to operate a program to solicit bids and enter into service agreements for the sale and purchase of electricity and related services and equipment for residential and small commercial customers who do not opt out of such program; and
WHEREAS, the City, in a referendum held on March 20, 2012, submitted to the City's electors the question (the "Referendum Question") of whether the City should have the authority to arrange for the supply of electricity for its residential and small commercial customers who have not opted out of such program (the "Program"); and,
WHEREAS, on March 20, 2012, the electors of the City of Aurora approved the Referendum Question by a margin of 61.4% to 38.6%; and,
WHEREAS, on June 26, 2012, the Aurora City Council approved a plan of operation and governance (the "Plan") for the Program in compliance with the requirements of state law; and,
WHEREAS, on May 24, 2012, the Aurora City Council accepted the bid of First Energy Solutions to provide electricity to the City's residential and small commercial customers for a two-year period beginning in August 2012; and
WHEREAS, the power supply agreement with First Energy Solutions will expire in August 2014; and
WHEREAS, pursuant to the Plan, the City has solicited bids from qualified suppliers to provide electricity to the City's residential and small commercial customers beginning in August 2014; and
WHEREAS, the City has examined and evaluated the bids received with respect to cost and other criteria specified in the Plan; and
WHEREAS, the bid of $0.08086 for the supply of electricity for 24 months has been deemed by the City to have best satisfied the criteria specified in the Plan for the selection of an electricity supplier.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows:
Section 1. The Mayor or the Chief Financial Officer/City Treasurer is hereby empowered to execute the attached agreement with Homefield Energy to supply electricity to the residents and small commercial businesses of Aurora pursuant to the City's Electricity Aggregation Program subject to a favorable review by the City's special counsel.
Section 2. The Chief Financial Officer/City Treasurer is authorized to take other actions as necessary to implement Section 1.
PASSED AND APPROVED on ______________.
AYES ____ NAYS ____ NOT VOTING ____ ABSENT ____
____________________________ __________________________
Alderman Bohman, Ward 1 Alderman Garza, Ward 2
____________________________ __________________________
Alderman Mesiacos, Ward 3 Alderman Donnell, Ward 4
____________________________ __________________________
Alderman Peters, Ward 5 Alderman Saville, Ward 6
____________________________ __________________________
Alderman Hart-Burns, Ward 7 Alderman Mervine, Ward 8
____________________________ __________________________
Alderman Bugg, Ward 9 Alderman Johnson, Ward 10
____________________________ __________________________
Alderman Irvin, At Large Alderman O'Connor, At Large
ATTEST:
____________________________ __________________________
City Clerk Mayor