Title
Electricity Aggregation Bid Award
History
The Village's current electricity aggregation contract with First Energy expires in May 2017. The Village adopted an electric aggregation "opt-out" program via referendum in 2012. Since the program inception in 2012, the total community energy savings for participating were over $8.2 million.
Over the last month, the Village’s electrical aggregation consultant, NIMEC, has solicited proposals for the sale of electricity under the authorized electrical aggregation program. The Village is seeking proposals with an “escape clause.” This provision preserves the Village’s ability to leave in case the new June 2017 ComEd rate is less than the quoted rate. On February 20, 2017, the Village will be receiving pricing proposals from various electrical suppliers.
The process to switch suppliers takes about 70 days. To position Orland Park customers for a smooth transition from one supplier to the next, the early migration from FirstEnergy to a new supplier was desirable.
Due to the commodity nature of the electricity market, the Village Board has the option to select a supplier that evening and authorize the Village Manager to proceed with finalizing an agreement since the quoted price is good for only 24 hours. However, Dynegy has consistently offered the lowest. They have agreed to hold their prices until Tuesday morning. Below are three options to consider:
1. Accept 16 month proposal (May 2017 - September 2019) with no ComEd price match guarantee. If the ComEd rate that will be released in May 2016 is lower than the proposed rate, each participating resident will have the option to revert to ComEd by opting out individually, with no assessed early termination penalty. The additional four (4) months will put us in line with ComEd's actual rate, instead of the estimated rate.
2. Accept 12 month proposal with ComEd price guarantee. If supplier decides not to match the low rate, all participating residents will be reverted back to ComEd collectively, with no assessed early termination penalty.
3. Accept none of the proposals. Suspend the program and the Board can decide to go back to the market at a later date.
Mr. David Hoover from NIMEC will be available to discuss the proposals and answer any questions.
I move to approve authorizing the Village Manager to execute a purchase agreement with Dynegy for the supply of electric energy to Village residents pursuant to the Village's electricity aggregation program and consistent with the Village’s adopted Plan of Operation and Governance, subject to review & approval by the Village Attorney, for a period of 16 Months and consistent with the proposed Master Power Supply Agreement at the rate with Dynegy of 6.79 cents/kwh;
Or
I move to suspend the Electricity Aggregation program and the Board can decide to go back to the market at a later date.
Financial Impact
There are no direct cost impacts and/or consultant fees. Consultant fees will be paid via the third party electrical supplier associated with municipal aggregation.
Recommended Action/Motion
I move to approve authorizing the Village Manager to execute a purchase agreement with Dynegy for the supply of electric energy to Village residents pursuant to the Village's electricity aggregation program and consistent with the Village’s adopted Plan of Operation and Governance, subject to review & approval by the Village Attorney, for a period of 12 Months and consistent with the proposed Master Power Supply Agreement at the rate with Dynegy of 6.93 cents/kwh;