BACKGROUND

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 our revenue generating facilities such as water pumping stations and parking garages.  We also pay for the electricity supply for Village street lights.   

In 2008, the Metropolitan Mayor's Caucus (MMC) facilitated a process for selection of an energy broker to represent participating municipalities interested in securing competitive electricity pricing for their revenue generating facilities. The MMC administered a Request for Proposal (RFP) process and as a result of this process chose Energy Choices to represent participating municipalities. As a broker, Energy Choices obtains competitive bids from Illinois authorized energy suppliers on behalf of participating MMC communities. Since 2008, the Village has retained Energy Choices as our energy broker, and together we continually monitor energy pricing.  Based on our positive experiences with Energy Choices, we believe using them again is prudent and that going through our own RFP process to select another broker would not yield any better pricing. Each time our non-franchise contracts are nearing expiration, Energy Choices runs online auctions to secure competitive pricing on our behalf. 

On May 19, 2014, the Village Board authorized the Village Manager to enter into Electricity Energy Supply contracts for the Village's non-franchise Pumping, Parking Garage and Street Lighting Accounts.  Our current contracts run though December 2017 for both Pumping, Parking Garage and Street Lighting energy. Staff is requesting permission to enter into our next contract at this point because pricing is favorable at this time.  Depending on market fluctuations, we are anticipating a $40,000 annual reduction in energy supply charges compared to our current contract, as energy prices are presently stable.

Based on the initial MMC Program specifications, Energy Choices will be compensated directly by the energy supplier. Staff plans to request pricing for two-year and three-year contracts with 100% Green Renewable Energy as we have in the past. Once pricing is secured, Staff will determine, with input from our consultant, whether a two-year or three-year contract is in our best interest. The Village will then contract directly with the energy supplier, not with Energy Choices. Because the pricing for electricity supply changes throughout each trading 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.

RECOMMENDATION

It is recommended that the Village Board authorize the Village Manager to execute a two-year or three-year electricity supply purchase agreement with the selected provider, as chosen through the online auction managed by Energy Choices. The Village Manager will report to the Village Board on the electricity supply contracts and the rates procured once they are approved.