Electric aggregation may not be good option for Winchester
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By Carmen Ensinger
The city of Winchester thought they were doing a good thing for the citizens of Winchester when they entered into an 18-month agreement for electric aggregation with Constellation Energy a few months back, but with the new 18-month fixed rate set to take effect on July 1, that might not be the case.
Winchester signed an agreement with Constellation Energy for 11.6 cents per kilowatt hour. At the time, Ameren’s rate was more expensive. This rate is guaranteed for Winchester customers for the next year and a half no matter how high Ameren’s rate goes.
The city has its electric aggregation through SIMEC, based in Quincy. On May 31, SIMEC sent out a letter stating that Ameren Illinois had adjusted their electric supply rate for residential customers to a rate of 8.04 cents per kilowatt hour, which is 3.56 cents less than what Winchester’s rate will be at 11.6 cents come July 1 when the electric aggregation begins with Constellation Energy.
Unless Winchester electric customers choose to opt out of the electric aggregation with Constellation, they will automatically be switched from Ameren to Constellation on July 1. Letters were sent from both Ameren and Constellation notifying customers of this and giving information how to opt out of the switch.
The city’s rate with Constellation will become effective with electric meter readings in July.
“Although the municipality’s rate was lower than Ameren’s supply cost when bids were taken, recent auctions for energy supply produced significantly lower charges for electric generating capacity and fuel, the major components of electric aggregation rates in Illinois,” the letter said. “The city designed its electric aggregation program to assure that participants have access to the lowest price available on the market by permitting them to opt out of electric aggregation at any time and at no cost.”
Once the utility customer opts out, however, there is a 12-month wait period before they can opt back in. In other words, when Ameren rates go back up, in say three months, the residents can’t just go back to the fixed rate with Constellation – they will have to wait 12 months from the time they opt out.
Winchester resident Emory Wood said he had several older women call him confused about what to do.
“The letter Ameren sent out dated May 25 is confusing and I know right now Ameren is a lot cheaper than Constellation,” Wood said. “So, what is the advantage for a homeowner to be locked into this thing with Constellation now that Ameren has reduced their rate?”
Mayor Rex McIntire said when he signed the agreement, Constellation was cheaper.
“They were a little bit cheaper when I signed the agreement, but the thing is, Ameren can go up and down at any time,” McIntire said. “Right now, you will be saving 33 percent if you opt out of Constellation, but we don’t know what the rate will be this winter.”
McIntire said there is a dedicated phone line just for Winchester customers to call to opt out of the service. That number is: 833-603-1332. Calls are taken in the order they are received and callers can avoid lengthy wait times by leaving a request for a return call.
According to the letter, electricity prices have been volatile in the regulated as well as the competitive market over the past year. Ameren’s regulated supply rate more than doubled, from 5.478 cents to 11.833 cents per kilowatt hour before the recent decrease.
The utility is also permitted to recover and refund differences in its costs of energy when those costs vary by five percent from the approved rate. Such cost differences, known as purchased energy adjustments, are passed along on consumers’ monthly bills. Electric aggregation customers are not charged purchased energy adjustments.
Ameren will continue to deliver electricity to residents and small businesses, answer calls about power quality and outages and bill for all electric supply and distribution services. Answers to questions about delivery service and bills are available by calling Ameren’s toll-free number at 800-755-5000.
