Municipal Electric Supply Aggregation
The City of Marion is committed to providing resources to our residents to help with the cost of their electric utility service provided by Ameren Illinois. Since 2021, the commodity price for electric supply has more than doubled at times causing residents’ bills to often do the same. Through a municipal aggregation partnership comprised of over 100 municipalities throughout southern Illinois, we had been able to lock in a supply rate of $0.054/kWh. The term of that rate expired in December 2023. With six months remaining on that contract, back in the summer of 2023, the aggregation partnership sought bids for a new aggregation supply contract. Unfortunately, the best deal was presented by Homefield Energy with a new supply rate of $0.084/kWh which represents a 55.5% increase in supply rate. The contract is a short-term deal that expires in June 2024. Around that time, the aggregation partnership has two options. 1. We can opt out of that contract and renegotiate a better rate. That will only be possible if the supply commodity rate is below our current rate of $0.084/kWh. 2. We assume the commodity rate will be above our current rate and will likely stay that way for the foreseeable future. Under this scenario, we can exercise an option on the current contract, at the current rate, that would essentially turn the short-term contract into a five-year contract with a new expiration date of December 2028.
There are a few alternatives to this supply aggregation agreement. Every resident can opt-out by returning the yellow postcard you received in the mail or by calling our current supplier, Homefield Energy, directly at 866.694.1262. The supplier, does, however, have a stipulation that if you opt-out, you must wait 12 months to re-enroll in the program. That is important because Ameren’s supply rate changes every four months. If a resident chooses to opt out they have two options: 1. Seek a supplier other than Ameren or 2. Choose Ameren as the supplier. Before a resident makes that choice, we urge them to review a history of Ameren’s supply rates at plugin.illinois.gov. That website has a lot of information about municipal aggregation, a history of utility supply rates, and consumer choice. In the last 24 months, Ameren’s supply rate has been as high as $0.12236/kWh, which represents a 46% increase over our current aggregation rate.
Community Solar
The Illinois Solar For All (ILSFA) program, is a state initiative designed to bring the benefits of solar energy to everyone, especially households and communities that can be considered low-income. The ILSFA program is a part of the Future Energy Jobs Act, passed in 2016. It aims to increase access to solar energy for low-income communities, providing cleaner energy and jobs where they’re needed most. The program prioritizes environmental justice, ensuring that the benefits of renewable energy are accessible to all, regardless of income or location.
Community Solar projects are central solar installations where community members can contract with a company to receive a credit on their electric bill for the energy produced at one of the Community Solar Farms in their region. The benefits are tied, mainly, to low-income earners assisting those who need it most. Here are the three main benefits:
- No Upfront Costs: The ILSFA program requires no upfront costs, making it easier for everyone to participate.
- Savings on Energy Bills: Participants can save up to 50% on their electricity bills. (Participants are likely to save closer to 50% in the sunnier months, and less than that in months with more average days of cloud cover.)
- No Solar Installation: Community Solar farms are typically built on private land within Ameren’s service area and will not require any installation at a participant’s home.
At present, four vendors are serving our area. Residents, regardless of income level, are encouraged to contact one or all of the State-approved vendors to see if they qualify for community solar credits. A resident can only receive benefit from one vendor, however, each vendor has different levels of benefits and capacity, so we encourage researching all vendors to determine the best deal. The City of Marion does not endorse any of these vendors, the State of Illinois vetts each vendor and approves those that meet the list of requirements outlined under the ILSFA program. A list of approved vendors can be found by clicking here.
Community Solar does not require any installation of panels on your property, residents can simply sign up and receive the benefit of a solar farm built somewhere within Ameren Illinois’ service territory. While it sounds “too good to be true,” we have researched extensively and have not found any risk to our residents which is why we encourage residents to research the vendors and find the best deal that will best serve their needs.
Frequently Asked Questions
How can the City force every Ameren customer to use an aggregation supplier?
Marion voters passed a referendum in November of 2012 to allow for the aggregation process. The referendum asked voters “Shall the City of Marion have the authority to arrange for the supply of electricity for its residential and small commercial retail customers who have not opted out of such a program?” The vote passed by a margin of 1430 votes. The referendum paved the way for the City to advocate on behalf of our residents by entering into the supply contracts described above. It still gives the resident the option to opt out, but until they do so, they are automatically enrolled in the program at the onset of each new supply contract.
How much does the City make off of these supply contracts?
The City gets no benefit by participating in the aggregation process. Furthermore, all of the municipalities in southern Illinois that participate in this process use a consultant to negotiate the best deal on our behalf. We do not pay any fees to be a part of the partnership nor do we receive any fees for participating.
Why would the City sign a contract that saw a 64% increase to consumers?
The alternative would have been not signing a contract and forcing our residents to use Ameren as their supplier. We believe the volatility in rates is risky for our average resident and believe that the aggregation process, on average, saves residents money on their electric utility bills. The alternative to signing a contract that realized a 55.5% increase would be to subject our residents to Ameren’s tri-annual rate changes. Over the past 24 months, Ameren’s rate, and really the market/commodity rate, has been as high as $0.12236/kWh. Given that volatility, we still believe the negotiated rate through Homefield Energy, again on average, will save residents money by fixing their rate at a generally below-market price.
We’ve had companies going door-to-door selling solar, is that what this is?
Not typically. The companies that have been in Marion over the last few years selling solar are generally selling home installations. They are trying to offset a large majority of a resident’s electric usage by installing electric-generating solar panels on the roof or land adjacent to the home. There are dozens of companies, both local and from out of the area, that offer that type of installation. We also encourage you to seek those companies out and determine if that type of benefit makes sense. Typically, those companies can offset 70-90% of an electric bill but require an upfront investment to purchase and install the panels. Others offer Power Purchase Agreements or PPAs that require a monthly fee for “renting” the panels. In PPAs, there are often no up-front costs and the resident never owns the panels, they simply get benefits from them. Residents who choose to invest in owning solar panels can get the benefit of several State and Federal tax credits to help offset the cost of the purchase, residents who enter PPAs pass those credits on to the company they are purchasing the power from. The City does not recommend, endorse, or regulate these companies, our role is to simply evaluate a building permit as they are filed to determine if the installation meets the required building codes. NOTE: If a vendor is going door-to-door offering anything for sale, please ask to see their city-issued Solicitors Permit. The City requires a background screening before considering approval of every door-to-door solicitor, if a solicitor does not have an approved vendor permit on their person, please contact the Marion Police Department at 618-993-2124 and report to them as much information as you can gather about the solicitor. A list of approved vendors can be found on our website at: https://cityofmarionil.gov/door-to-door-solicitors-and-peddlers/