Oak Park seals green deal on electric

Consumers save money under renewable energy pact

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By Jean Lotus

Contributing Reporter

The Oak Park village board made green energy history at Monday's board meeting by approving a plan it believes is the first in the United States to purchase aggregated energy delivery through 100 percent renewable energy certificates (RECs). The village contracted with Integrys Energy Group for a two-year agreement to deliver energy at a price some 25 percent cheaper than Com Ed. The aggregation is projected to save Oak Parkers $4.5 to $4.6 million.

"This is a huge win," said Village Manager Tom Barwin, "We have a 25 percent reduction to the supply portion of our energy bills and a 100 percent commitment to renewable energy for Oak Park for the next two years.

"To some, this may be just about saving money on one's electric bill, which is a very good thing. But to those increasingly growing numbers of individuals who recognize the need to move as quickly as possible beyond carbon-based energy generation systems toward clean, renewable energy sources, this is a significant, far-reaching step," said Barwin.

A $400,000 Energy Efficiency Fund proposal, funded by taking a 10 percent share of the savings to consumers, was shot down by trustees, who compared it to a "tax." "I get concerned when we create a pot of money without clear goals," said Trustee John Hedges. Trustees suggested that any "green" projects the staff wanted to present could be proposed within the regular village budget process.

Energy aggregation is a result of deregulation passed in the energy markets in 2007. As a result, municipalities are now permitted to buy large blocks of energy at discounted rates previously only available to large corporate consumers. Brokers bundle sources of energy and resell. The village considered 13 different providers before choosing Integrys, which is headquartered in Illinois and employs 1,900 people. Integrys is now contractually obligated to purchase renewable energy supplies in an amount at least equivalent to the power being consumed in Oak Park.

The program will start as soon as January. Oak Park energy consumers will still get a single bill in the mail from Com Ed. The energy supply charge portion of the bill, typically about 60 percent of an average bill, will be subcontracted to Integrys which will charge 5.78 cent per kilowatt hour. Oak Park's 20,000 residential energy customers now pay 7.77 cents per kw hour to Com Ed for energy supplied.

Customers can opt-out and stay with Com Ed, if they choose. But, "if they don't opt out, they're in," said Barwin. On a $100 electric bill, consumers will typically save around $15 per month in reduced supply charges. ComEd goes before the Illinois rate-setting commission in May 2012, so it was important to hammer down a deal as soon as possible, said presenters.

In the audience Monday was visiting Mill Valley, Calif. Mayor Shawn Marshall whose Marin County community has also purchased aggregated energy – some of which is REC-derived. "You are on the threshold of making history here," she said. "I've been sitting in your chair [as a board member making the decision to aggregate electricity]. You're setting an important precedent."

Oak Park Sustainability Director K.C. Poulos said she and consultant Craig Shuttenberg of Energy Choices have studied the Marin County process to learn from it. "They're farther along than we are," said Poulos.

RECs (or green tags) are financial instruments that credit 1 REC for every megawatt hour placed on the electrical grid by wind-farms or other renewable energy sources. The farms contributing to the Oak Park RECs are located in the northern United States and Canada. RECs purchased by the village come from 95 percent wind power and 5 percent other sources.

Integrys presented Oak Park with a slightly cheaper option (about $1 per month less per bill) that would have derived energy from primarily from nuclear and coal sources, but the board agreed that the cleaner energy was preferable.

Seventeen other area communities, such as North Aurora, Grayslake and Oak Brook have made similar deals with Integrys for energy aggregation. Poulos said these other towns had a 10 percent opt-out rate, either because they had made separate contracts with other energy delivery companies or from "loyalty" to Com Ed. "There has to be an education component," to the village plan, she said.

Barwin and Poulos said the deal would put Oak Park on the map. Because Com Ed wired Oak Park as a pilot community into their now-delayed "Smart Grid" program, Poulos and Barwin said that Oak Park residents could be the first to try new energy saving technology that communicates with the Smart Grid. Barwin said he sees economic opportunities. He was disappointed that the Energy Efficiency Program was not passed, but said, "We wanted a home run-- but we got a triple." Barwin hopes to encourage Oak Parkers to reduce their energy consumption by three percent a year using incentives, tools and education. "We want them to [ideally] turn homes from energy hogs to energy producers."

During the meeting Barwin likened the goal for sustainability to another chapter in Oak Park's history: "When Oak Park embraced integration and diversity [Oak Park] put its money where its mouth is. Some of see sustainability as the challenge of this generation. Oak Park has been a leader in so many important movements over the past half century, it is not surprising that our community would be a leader in fundamentally changing how we think about energy generation and consumption.

Reader Comments

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Gary from OP  

Posted: November 11th, 2011 9:57 PM

A bit of a shell game. Like paying to plant trees in Brazil so you can continue to burn coal in OP. Wants lower rates? Conserve and use less. Want to be green? Lobby for wind and solar in IL.

Harmon wants to raise your electric bill from OP  

Posted: October 26th, 2011 5:11 AM

What about our own Don Harmon's trying to override Quinn's veto of the massive ComEd rate hike? Apparently Harmon believes that ComEd does a good job and should be guaranteed profits for the next 10 years...and that you and I should pay for that. He wants us to pay for a "smartgrid" for a monopoly who will not even guarantee us fewer outages for the billions we will pay!When will we finally vote this political hack (who is clearly in the utility's backpocket) out of office? Not soon enough...

Jim Coughlin  

Posted: October 25th, 2011 8:28 PM

I was wondering about too,Enuf. The two-year contract the board signed appears to offers savings for Oak Park residents but my questions relate to whether or not there is any downside to the deal and if a worst case scenario was part of the trustees' decision making process. I can't recall the paid consultant expressing any concerns. The Forest and Lake hotel project was also presented as a Win-Win for the Village but since that has fallen apart much of the initial enthusiasm has been tempered.

Enuf is Enuf from Oak Park  

Posted: October 25th, 2011 5:54 PM

With the retail electric market deregulated, there is risk in any decision. Integrys was very aggressive with its bid rates to be awarded contracts from OP and other suburbs. As such, the concern is the Integrys business plan is to gain initial municipal contracts w/ a low-ball teaser rate, and then raise subsequent rates after the contracts expires. This strategy worked well for Waste Management, Inc. in their current no-bid solid waste collection contract w/ the village.

Jim Coughlin  

Posted: October 25th, 2011 2:25 PM

I hope Trustee Ray Johnson might be able to answer my questions. We're learning how important this program will be in helping to reduce energy consumption and lower costs for consumers. That sures sounds like a positive benefit for residents and the environment. I'm wondering if there is any actual downside and was a worst case scenario explored before the board signed off the deal? Is this really a total Win-Win for Oak Park and,in fact, there's no need for anyone to worry?

M on Ridgeland from Oak Park  

Posted: October 24th, 2011 4:36 PM

We have been on Com Ed's Real Time pricing program and have seen a real savings. Go to www.wattspot.com and you can see what the rate is for that hour and future pricing. Some times it is FREE in early hours or very low. Set appliances to run at these times! May need to adjust times you do laundry etc... Saves money! Do your research before joining anything!

Bell  

Posted: October 24th, 2011 4:07 PM

My mailbox is crammed with sales pitches from energy providers. Is the deal offered through the Village really the best for residential customers? Who should we trust? Interesting to read that our own Sen. Harmon is pushing to override Gov. Quinn's veto of the proposed ComEd rate hike. We've known for years that Harmon,Madigan and Cullerton receive big bucks from the utilities and special interest lobbyists. Voters need to wise up and toss these guys out of office. They don't work for us!

Enuf is Enuf from Oak Park  

Posted: October 23rd, 2011 9:39 AM

While the village compares their aggregation rate ($0.0576) to the current ComEd rate ($0.07733), the village rate is fixed for two years, while the ComEd rate may drop and allows real-time pricing. Also, residential electric consumers may purchase their electricity from other alternative electric suppliers as well. All rates are available at the Plug In Illinois, http://pluginillinois.org/. Currently, the lowest available rates are $0.0599 (variable) and $0.06400 (fixed).

Enuf is Enuf from Oak Park  

Posted: October 23rd, 2011 9:38 AM

Kudos to Trustees Hedges, Tucker, Brewer, Johnson and Lueck for removing the $400K contract fee from the electric aggregation resolution. It was through their diligent discussion and reasoning that Pope/Barwin's pot of money was seen for what it was ... a $400K slush fund. That being said, the board took an unnecessary risk in passing the resolution in haste for the sake of being perceived as being first, and will have to take responsibility if it does not work out as planned.

Sean from Oak Park  

Posted: October 20th, 2011 5:14 PM

How does "green energy" or renewable energy save us money when, in almost every case, electricity generated from renewable sources cost more than generating energy via traditional methods?

Teresa Powell  

Posted: October 20th, 2011 2:43 PM

In my earlier comment I did not imply that less coal would be burned on S. Pulaski as a result of this decision, but Paul S. has also shown the positive impact of this decision on overall energy production. We are no longer going to pay for coal/nuclear production. That's a good thing.

Paul S. from Oak Park  

Posted: October 20th, 2011 1:32 PM

I'm thinking that our participation in the REC's system puts more overall demand to produce green energy, thus encouraging the peaceful transition in our society to sustainable energy production. Does that make sense?

paul  

Posted: October 20th, 2011 10:26 AM

In answer to my own question, wikipedia says "It is important to understand that the energy associated with a REC is sold separately and is used by another party. The consumer of a REC receives only a certificate." So, legal fiction. We aren't getting green energy, we're just subsidizing someone else's green energy. Or maybe wikipedia is wrong, wouldn't be the first time. Anyone have a more authoritative answer?

paul  

Posted: October 20th, 2011 10:17 AM

I'm happy about the lower prices, and very happy they went with renewable energy. (I don't understand RECS though or why they didn't just buy the energy from the wind farms... is this *really* renewable energy or just a legal fiction?) Anyway, special thanks to this web site/paper for the article about the hidden tax nonsense; no doubt it would have gone through if the Board hadn't been caught with their hands in the cookie jar.

mv113 from op  

Posted: October 19th, 2011 4:41 PM

The price for power purchased through Com Ed is adjusted seasonally. Is this price compared to the average rate from Com Ed or is it compared to the summer rates, which are the highest for the year. Will these rates adjust seasonally? The seasonality is why you only see ads for alternate suppliers in the summer months.

Grateful  

Posted: October 19th, 2011 3:54 PM

Not true about the "reservoir" Teresa, that's the sales pitch not the technological reality. I wasn't being critical just letting the people realize that Oak Park will not magically be getting their power from a windmill or solar farm. The RECs finance green energy production ELSEWHERE - they don't reduce the coal burned on S. Pulaski.

Teresa Powell  

Posted: October 19th, 2011 3:05 PM

No particular electron can be "tagged" for the grid to deliver to Oak Park, but Oak Parkers will be paying for green energy to put into the energy grid (think of it as a big reservoir of electrons); that's the key issue.

Grateful  

Posted: October 19th, 2011 2:48 PM

It should be noted that all the ACTUAL power used in Oak Park will be derived from coal and nuclear plants. The RECs pay for clean energy generation in other areas of the country. Still grateful for the lower cost and rejection of the $400K tax. Now if we could somehow tap into the Hillside landfill for biomass energy THAT would be a huge win!

Teresa Powell  

Posted: October 19th, 2011 2:30 PM

@Q, some vehicles in the Village fleet have included natural gas alternative fuel for a number of years and recently an all-electric vehicle was added as well.

Ray Johnson from Oak Park  

Posted: October 19th, 2011 2:01 PM

The board approved a change in the enacting ordinance, opting for a 100 percent renewable energy source over the "lowest available cost" option. The lowest available cost option had savings of 26.09 percent over current ComEd rates. Totally renewable energy (92-94 percent wind) saved 24.29 percent. Due to such a small difference in savings, we opted for 100% renewable.

Q from Oak Park  

Posted: October 19th, 2011 1:24 PM

This should make everyones toes tickle in Oak Park. Hurrah!! Oak Park once again leads the way. Sweep the pooh pooh under the carpet when things turn out differently. Oak Park's fleet could be on alternative energy but it isn't. That would make some news and make a much cleaner environment.

J.M Konecki  

Posted: October 19th, 2011 12:48 PM

This is a grand slam. Low cost AND green!! Thank You V B of OP.

Tony from Oak Park  

Posted: October 19th, 2011 11:35 AM

It was earlier reported that both a lowest cost option and a 'green' option were going to be offered. The story above states that Integrys offered a cheaper option based on nuclear and coal but that it was rejected by the board. I wonder if a lowest cost option still going to be made available.

Grateful three, from OP  

Posted: October 19th, 2011 6:21 AM

Yes, thank you for the agreement AND rejecting the tax... we need to do more things like this to ease the burden on residents.

Grateful, too. from OP  

Posted: October 19th, 2011 4:58 AM

Yes, thank you Board for deciding that a poorly conceived, fundamentally sneaky idea that you came up with should not move forward.

Grateful  

Posted: October 18th, 2011 11:45 PM

Thank you Board for rejecting the $400,000 tax; you did the right thing.

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