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.