Tuesday, October 10, 2017

Why Am I Getting These Calls & Letters from People Claiming They Can Save Me Money on My Ameren Electric Bill?

  • Overview: The Illinois electric deregulation law, originally passed in 1997, phased in the ability of various classes of customers of investor-owned utilities (IOUs) to choose electric suppliers other than their own traditional utility. In the initial years, customer choice was limited to the largest customers (mostly industrial accounts) of the IOUs, primarily because the economics of choosing an alternative supplier of electric energy only worked when very large amounts of energy were being purchased. These customers still pay the incumbent utility a fee for the transmission and distribution of electricity, but the power itself comes from a third party (not the utility). Now some alternative retail electric suppliers (ARES) are beginning to market to individual residential cusomters in the state. The ARES seek to sign up enough customers of investor-owned utilities to knit together a large enough pool of customers to allow the ARES to achieve savings by buying electricity in bulk, at a lesser price. This is caller aggregation.
  • Municipal Aggregation: Also, due to tweaks to the deregulation law, entire units of goverment are now able to choose to enter into a third-party energy contract on behalf of their citizens. This "opt-out" approach requires the municipality to pass a referendum, then requires the Council to enact an ordinances which allows them to negotiate with a power provider.
  • Direct Advertising to Investor-Owned Utility Customers: There are 77 ARES operating in Illinois, though not all operate in the same areas. Unfortunately, marketing materials from these ARES have reached customers of cooperative and municipal systems and may be causing some confusion.
  • Municipally-Owned Systems are Exempt: The Illinois electric deregulation law exempts cooperative and municipal customers from participating in these so-called customer choice aggregation plans. This is largely because lawmakers understand that customers of municipally-owned electric systems are already receiving the benefit that these alternative energy suppliers are just now offering Ameren customers. That's because, as a customer of a municipally-owned and operated electric system, you are already the member of an aggreated customer pool, IMEA, that provides the benefits being touted by other energy providers. On top of that, as a customer of a municipally-owned utility, you have several advantages over customers served through ARES, including: competitive utility pricing, reliability and a value economic development tool.
  • For more information, or with any questions, please call the City Utility Office at 932.4885.