The Village's franchise agreement with Commonwealth Edison includes electricity supply for all of our non-revenue generating buildings. This franchise electricity covers Village Hall, the Police Station, Public Works, the Senior Center, and all four Fire Stations. The Village is required to pay for electricity for streetlights and revenue generating facilities such as water pumping stations and parking garages. 

Since the energy supply pricing fluctuates during the day, the authorization to lock in rates must be made quickly.  In the past, the Village Board has given that authorization to the Village Manager, who will report to the Board once the rate lock is made.  Once pricing is secured, Staff with input from the Village's consultant (Santori Energy) will advise whether a two-year or three-year contract is most advantageous.

Due to considerable market volatility, our consultant is recommending the Village hedge the market by bidding our energy demands over the next 12 months.  Staff is proposing the same bid process as we have historically completed; but will bid out the energy supply each quarter over the next 12 months, dependent on the market.

The current contract for energy supply is the lowest it has been since aggregation at $0.027/kWh for street lighting and $0.045/kWh for utility pumping. Santori Energy believes the energy cost for the next contract will most likely increase by 70%.

RECOMMENDATION

It is recommended that the Village Board authorize the Village Manager to execute multiple two-year or three-year energy supply purchase contracts over the next 12 months, with the selected providers, as chosen through the online auction managed by Santori Energy. The Village Manager will report to the Village Board on the electricity supply contracts and the rates procured once they are approved.