Title
Renewal of Membership in Northern Illinois Municipal Electric Cooperative
History
In April 2007, the Board approved the Village’s participation in the Northern Illinois Municipal Electric Cooperative (NIMEC) in order to obtain more favorable pricing of the Village’s electric needs given that the industry had just deregulated. NIMEC is a cooperative with approximately 110 members, mostly municipalities (see attached list of members) that pools the energy needs of its members in order to secure more competitive pricing based on higher volumes than can be provided individually to a single municipality. These members purchase more than $20M in electrical energy each year through NIMEC; in the past, this aggregate purchasing power provided savings between 15 - 35%.
Upon joining last year, NIMEC went out to bid on the Village’s behalf in order to obtain the most favorable pricing on the Village’s largest five electric accounts - Sportsplex, Centennial Pool, FLC, Humphrey complex and the main water pumping station. When the bid came in, it was determined that only the Sportsplex, Centennial Pool and the main water pumping station accounts would realize any savings by changing over to a new supplier. Constellation New Energy was awarded the bid; to date the Village has realized savings of approximately $94,700.
ComEd will be setting its new rates in late January or early February. Although the exact dates are not known, NIMEC will be going to bid soon thereafter. Upon Board approval, NIMEC will once again go out to bid on the Village’s behalf with a minimum of two suppliers to obtain the lowest bid. This bid process should occur some time in February. The term of the bid will be June 2008 - May 2009. NIMEC is anticipating a 10% increase in the cost of electricity for the bid period. Upon selection of the lowest bidder, the Village would have two days to enter into a contract with this bidder. This contract would have a termination date of May 2009, at which time NIMEC would once again go out to bid on the Village’s behalf. The Village would continue to receive one bill per account from the chosen supplier; included on these bills would be Com Ed’s delivery charge.
Staff recommends that the Village continue its participation in this cooperative in order to realize substantial savings on the cost of electricity and asks that the Board approval the continuation of this participation for the next three years, subject to the continued performance level of NIMEC.
Financial Impact
The Village included an increase of approximately 27% in the cost of electricity in its FY2008 budget which should more than cover the anticipated increase in the cost of electricity. A final estimate of savings will be made on the date the Village actually enters into a contract with the chosen supplier.
Recommended Action/Motion
I move to recommend to the Board to approve continuing the Village’s participation in the Northern Illinois Municipal Electric Cooperative in order to obtain favorable pricing on the Village’s electricity needs for fiscal years 2008, 2009 and 2010,
and
to authorize NIMEC to go out to bid on the Village’s behalf for the procurement of electrical power for all applicable accounts in each of these fiscal years
and
to authorize the Interim Village Manager to execute a contract with the lowest responsible bidder.