Municipal Electricity Aggregation: Why You Should Vote Yes on the March 20th Primary

— by William C. Rau —

After this spring’s primary on March 20th, electricity power supply in Illinois could be transformed beyond recognition. Why? Because citizens in 267 cities, towns, and communities in the Ameren and ComEd service areas will be voting on municipal or community electric aggregation.(1) If Ameren customers in Bloomington and Normal approve aggregation, they and possibly as many as 57 other central Illinois communities will choose to pool residential and small business owners in a single buying block — possibly 300,000 customers or more.
 
That’s a lot of market ‘power’.
 
Good Energy, L.P, will manage the aggregation process for the communities voting “yea”.(2) It will hold two meetings to solicit preferences from community members and then request bids from Alternative Energy Suppliers that have been certified by the Illinois Commerce Commission. I am presently paying 5.8¢ per kilowatt hour for wind power from BlueStar Energy, which is one of the certified suppliers. That’s 8% below Ameren’s charge of 6.3 cents. So, it is highly likely that a large pool of customers will receive a bid at least 20 to 25% below Ameren’s current charges.
 
Ameren will still deliver the electricity to your home. Since delivery costs will increase, due to approval of the “Grid Modernization” or “Smart Grid” bill in the last session of the Illinois Legislature, total savings will be reduced somewhat. In sum: municipal aggregation should more than offset scheduled increases in grid distribution costs thus yielding net savings in your electric bill.
 
Much more is at stake than just lower power supply costs. Good Energy has said that it intends to solicit bids for 100% renewable energy. Since wind power is now cost competitive with coal-fired power(3), we can opt for wind power or renewable power and receive the same low price levels that might be offered by coal-powered generators.
 
A move to renewables has a number of advantages. First, we will achieve a large reduction in pollution, not only CO2 emissions, but reductions in the release of mercury, arsenic, sulfur, and radioactive elements contained in coal. About 80% of Ameren’s power supply is generated from coal(4), so the move to 100% renewables will reduce the carbon footprint of typical Bloomington-Normal homes and apartments by 45% to 70%. That huge drop will be achieved in one year – not one or two decades. Someday we will again be able to eat game fish caught in Illinois without worrying about mercury contamination, and parents will not have to worry about the potentially damaging effects of mercury on their children’s intellectual development. Nor will there be a need to dispose of ton-upon-ton of highly toxic coal sludge, one of the nastier byproducts of coal-power production.
 
Second, the choice of wind helps to guarantee electricity price stability(5) in the future whereas fossil-fueled electricity generation has a long track record of price increases along with intermittent price shocks. It is not well known, but the heating value or energy content of U.S. coal has declined 30% since 1955 because the best coal has already been mined.(6) Ongoing declines in coal energy content, plus the need for lots of diesel fuel to mine and ship coal, guarantee steadily increasing costs for coal-fired electricity generation for decades to come.
 
Third, utility dollars saved will free up more dollars to spend at local businesses thus improving the economic well-being of our communities. While it is not possible to predict where wind power will be sourced, the growth of the wind industry is likely to benefit the Midwest due to its wind resources and manufacturers of wind turbine components. In comparison, coal offers, at best, a modest in-state advantage because 60% of coal burned in Illinois power plants is imported with the lion’s share of imports coming from Wyoming(7). In short, would you like your utility dollars to support wind farms, farmers, and often hard-pressed rural school districts or open pit coal mines in Wyoming?
 
There is one final point worth consideration. Aggregation is a voluntary program: if you’re not interested, you can “opt out” and stay with Ameren as your power supplier. If you stay with aggregation, you will get only one bill. It will be from Ameren and they will send the power portion of your bill along to our chosen power supplier.
 
My recommendation? Vote yes for municipal aggregation.

Sources:

1 For the list see: http://www.icc.illinois.gov/ormd/municipalaggregationex.aspx

2 http://www.goodenergy.com/; http://www.munienergychoice.com/

3 http://www.greentechmedia.com/articles/read/what-do-winds-cost-price-and-performance-trends-show-three-cents-per-kilowa/

4 http://www.epa.gov/cleanenergy/energy-and-you/how-clean.html

5 http://www.greentechmedia.com/articles/read/winds-future-ally-better-transmission/

6 http://www.energybulletin.net/node/45005; http://www.theoildrum.com/node/4061

7 http://www.isgs.uiuc.edu/maps-data-pub/publications/energy01/globalm.shtml