Consumers of residential electricity within the city of Galesburg should prepare themselves for some sticker shock when they receive their power bills later this summer.
Due to various factors — including inflation and market volatility — Galesburg’s new agreement for municipal aggregation of electricity supply will see the price per kilowatt-hour soar 58% for those consumers who participate in the program.
The newly negotiated rate with Constellation energy company will be $0.08677 per/kwh for standard energy and $0.08989/kwh for renewable energy. Currently, Galesburg has an agreement with Homefield Energy that provides participating consumers a rate of $0.05499/kwh for renewable energy.
The city’s energy aggregation program is an “opt-out” program, meaning Galesburg residents are included in the program unless they elect to go with Ameren or negotiate on their own.
Higher rates go into effect in August
Galesburg’s 3-year contract with Homefield expires in July, meaning the new rate with Constellation goes into effect in August.
Eric Hanson, Galesburg city manager, tells WGIL, “First, we have inflation in general — the cost of doing everything has gone up. Energy is not excluded from that. Everything related to the production of energy is more expensive.
“This is certainly going to have an impact on residents, especially during the higher demand months. Just like any inflationary pressure, these things always impact those on limited or fixed incomes the most, and that’s certainly a concern.”
Short of a better deal, Galesburg aldermen locked in the 1-year contract with Constellation energy company at Monday’s City Council meeting. Homefield was offering the city a rate of $0.092 for standard energy and $0.095 for renewable energy.
Customers can negotiate their own rate
Homeowners in Illinois are able to choose their own energy supplier with an approved vendor, however customers are locked into a plan for 12 months.
“The city is the vehicle for the energy aggregation program, and it’s worked very successfully and actually helped residents over the years,” Hanson said. “This isn’t something the city is gaining from — we’re just trying to negotiate the best rate possible.
“If any resident believes they can do better, they absolutely can do it. The city stands to gain or lose nothing.”
Galesburg residents that currently participate in the city’s energy aggregation program will have the option to choose between the new standard rate ($0.08677) and the renewable energy rate ($0.08989).
Since Galesburg first offered residents a municipal aggregation program in March 2013, residents have never paid more than $0.05635/kwh.
Mayor: Aggregation has been ‘an amazing program’
But Galesburg Mayor Peter Schwartzman said the energy aggregation program has saved local consumers millions of dollars since its inception, including more than $8.5 million during the current 3-year that expires this summer.
“The aggregation of electricity has been an amazing program for the city and its residents,” Schwartzman said.
Schwartzman noted the rise of electricity nationwide in recent years.
“Over the past few years we have seen electricity costs nationwide go up considerably,” he said. “In many parts of Illinois, rates have more than doubled.
“The increases in these rates are due to inflationary pressures that have hit most sectors of our economy. I am not happy about the rate increase but I am pleased with the city’s efforts to get a competitive rate and I am very pleased that residents will still have the option to support renewable energy electricity if they wish.”
Questions? Reach out to the city
Hanson noted if there was no aggregation program in effect and residents were on the Ameren base rate, they would be paying over $0.085 today, and would have paid as much as 11 and 12 cents a year ago.
Schwartzman said the city will provide citizens with further details on the changes in the coming days.
“There is some time to get this information out as these new rates won’t go into effect until this summer,” Schwartzman said. “I admire the hard and diligent work those in Public Works do.
“We, the residents of Galesburg, are definitely the beneficiaries of this strong effort.”
