Municipal Electricity Aggregation and Rising Electricity Costs for Ameren Customers in Bloomington Normal
The Town of Normal and City of Bloomington have both entered into a new municipal aggregation contract with Constellation Energy. The contract is for 3 years and begins on July 1, 2022. These contracts offer a fixed electric supply rate of 7.859 cents/kWh (with an option for 8.324 cents/kWh for a renewable energy source option).
Residents with Ameren electric service are automatically enrolled in the 7.859 cents/kWh rate. To opt-in to the renewable energy option, or opt-out of the aggregation contract call 833-358-0518. If you opt-out, you cannot opt back in for 12 months.
The 7.859 cents/kWh rate is higher than the current aggregation contract rate (this contract ends June 30, 2022), and the current Ameren rate (which will increase June 1, 2022). Please read on below for more information on what municipal aggregation is, how it works, the potential benefits, and for information on expected Ameren rate increases slated to begin June 1, 2022.
What is Municipal Electricity Aggregation?
- The Illinois Power Agency Act allows municipalities or counties to negotiate the purchase of of the combined electric supply from an Alternate Retail Energy Supplier (ARES) for residents and small businesses.
- The residents of the Town of Normal voted to approve municipal aggregation in 2012, and the residents of the City of Bloomington followed suit in 2013.
- Only Ameren customers are eligible for municipal aggregation. Members of Corn Belt Energy Cooperative are excluded.
- Electric aggregation allows the Town and the City to secure bulk pricing through a bidding process, and provide rate stability through the designated contract period (typically 2 or 3 years).
How does electric aggregation work on my bill?
- Through the electric aggregation process, the City and the Town secure a new electricity supplier for Ameren customers. Electricity delivery remains with Ameren and your monthly electric bill will still come from Ameren.
- Residents can also opt into a “green” option (see explanation of renewable energy sources below) at slightly higher rate.
- All Ameren customers in Bloomington and Normal are automatically enrolled in aggregation and must opt out if they want their supply service to remain with Ameren or if they have an individual contract with a different ARES.
What are the potential benefits to participating in municipal aggregation?
- Secure rates. Ameren rates are subject to change twice a year. They send their rate proposals to the Illinois Commerce Commission for approval. Locking in a known rate through the municipal aggregation program can help reduce the risk of fluctuating and unknown rates.
- Potential lower rates: The current Ameren price to compare (which is the combination of the Ameren Electric Supply and Transmission charge) through May 2022 is 5.478 cents per kWh. Ameren submitted new rate documents to the Illinois Commerce Commission on April 22, 2022. The new price to compare beginning June 1, 2022 will be 10.628 cents/kWh, and will increase to 11.5 cents/kWh from October 1, 2022 – May 31, 2023.
- Energy from 100% renewable sources. This does not mean the actual electricity you consume comes directly from a renewable energy source like wind or solar. The grid is constantly being fed by a variety of energy sources from nuclear to solar to coal. Plans that offer renewable sources mean that the energy supplier (in this case Constellation Energy) is buying renewable energy credits (RECs) on your behalf. The RECs represent clean energy that is being added to the power grid somewhere.
- Reduces hassle. Illinois’ deregulated energy market allows residents to purchase energy from other suppliers and other forms of reduced energy rates on their own, but this can be time-consuming and stressful, and risk potential scams.
Why are Ameren rates increasing?
- Ameren rates are increasing significantly for a variety of reasons. Ameren is part of the Midcontinent Independent System Operator (MISO), which is one of many independent organizations that handle electric grid operations, market facilitation for certain electric markets, and bulk electric system planning. MISO is responsible for operating the power grid across 15 U.S. states including most of Illinois (excluding the Chicago area). As part of MISO, Ameren is required to purchase energy capacity at the price MISO sets. The annual MISO capacity auction surged to $236.66 per megawatt-day from $5 a year ago for the Midwest region. MISO generating capacity was underestimated last year, and now costs are rising as a result of increased electricity demand as pandemic restrictions ease combined with a decrease in generation (renewable energy development is increasing, but is only partially weighted in the capacity market, and more coal-fired plants are going offline), and other market influences including inflation and the war in Ukraine. The rise in Ameren rates represents the increased wholesale price of electricity.
- You can cancel your aggregation participation anytime without penalty. Just contact Constellation at 833-358-0518. This means that if at any time Ameren’s rates appear lower than the pricing offered through aggregation (keep in mind Ameren’s rates can change every 6 months, and go back up at any time) you can cancel your participation.
- If you have a solar installation (roof or ground mount), Illinois law requires ARES to provide net metering to customers.
- If you have a community solar subscription, you can still participate in aggregation. However, it is important to remember that the 20% discount on your energy supply that most community solar subscriptions offer is a 20% discount on the Ameren rate, not a rate from an ARES.
What can I do about rising energy costs?
- Remember, the cheapest kilowatt-hour is the one you never use! Energy efficiency is a great way to save money on your utility bills, and the utility companies offer a variety of rebates and incentives for efficiency upgrades. Contact the Ecology Action Center to schedule a home energy assessment and let us help you find easy ways to save money by reducing your energy needs and consumption! Learn more at BNenergyBright or by calling 309-454-3169 x.15 or email [email protected].
- The EAC is also a great resource for information on renewable energy options. If you are interested in pursuing solar, we can help you get started!
- The EAC is a grassroots educator for the Illinois Solar for All program, which is state program designed to increase access to solar for income-qualifying (80% Area Median Income) residents and non-profits and public facilities that serve income-qualifying residents.
Who is the Ecology Action Center?
- The Ecology Action Center is the nonprofit environmental sustainability agency for Bloomington, Normal, and McLean County.
- The EAC provides a broad array of educational programs and services related to energy efficiency, renewable energy, air quality, waste reduction and recycling, clean water protection, climate change, and much more.