With the deadline for a new aggregation contract expiring Friday, some Peoria-area customers will be paying twice as much for electricity over the next 12 months.
Residents and businesses who opted into the aggregation program and had Homefield Energy as their supplier will now remain on the Ameren Illinois supply through next May.
“Roughly, it's going to be anywhere from $50-$60 a month increase in the bills based upon what the current energy rates are,” said Peoria City Manager Patrick Urich.
In a joint news release from the city and county, Urich said Ameren's supply rate is “approximately 12 cents per kilowatt hour,” more than double Homefield's charge of 5 cents.
Ameren spokesperson Marcelyn Love said the company's supply rate is actually 8.765 cents per kilowatt hour for June 1 through Sept. 30, while the “price to compare” – the combination of electric supply and transmission service charges – is 10.628 cents per kilowatt hour.
“A couple of things have transpired all at the same time to cause this to happen,” said Peoria County Administrator Scott Sorrel, citing the war in Ukraine driving up the price of natural gas on the global market, decommissioned coal-fired power plants reducing the overall supply, renewable energy sources being unable to make up that deficiency, and diminished transmission capacity of the national power grid to meet high demand.
“When you combine all those things together, it has caused the electricity market, which is traded like a commodity, to literally go haywire. And we fell victim to the timing of that haywire.”
Residents and businesses who had been under contract with Homefield for their supply had been switched to Ameren for the past two months following the conclusion of that contract. Illinois statutes related to electricity deregulation provided a two-month window for local governments to secure alternate pricing, but that window is now closed.
“Our energy consultant has been working with the power companies that generate electricity to try and get a price that is better than the market price that Ameren purchased roughly two months ago. Those power companies have been unable to match the price that Ameren got, or better that price,” said Sorrel.
“It's unfortunate that we weren't able to lock in anything in at this point in time, but I think the volatility in the market is still being reflected with some of those energy suppliers just right now,” added Urich. “We felt it was in the best interest of everyone to just simply stay on Ameren's rates for the next 12 months, then we'll come back a year from now and see if we can't get something locked in beginning next year.”
Sorrel said close to one-third of Ameren’s coverage territory in central Illinois is affected by the rate increase.
“It's not just Peoria; there's roughly about 45 communities that are involved in our buying group, it's about 110,000 households,” said Urich.
Sorrel cautioned residents to be wary of third-party suppliers who may solicit provider agreements through phone calls, emails or direct mail.
“The hook is generally that the first couple of months are very attractive and very affordable, but if you read the fine print of many of those types of offers, the cost of the energy significantly increases on the back end of that contract. In the long run, what we've seen historically is that it's not to the residents’ benefits to participate in programs like that,” said Sorrel.
Sorrel said if a new aggregation agreement for the 2023 fiscal year is reached, the former Homefield Energy customers will not need to take any action and will automatically be switched from Ameren to whomever the new supplier may be.
“Ultimately, we're hopeful that as we look at a contract next year, that we'll be able to secure something that will get everyone some savings in the future,” said Urich, who recommended residents consider cutting back on their electricity usage through conservation efforts as a way to absorb the rising costs.
Sorrel said anyone who may need help with their monthly energy bills can find a list of township offices and not-for-profit organizations offering assistance programs on Ameren's website, or by calling 211 or (309) 999-4029. Ameren also has energy saving tips and billing options available online.
