VILLAGE OF ELMWOOD PARK OPT-IN ELECTRIC AGGREGATION PROGRAM PLAN OF OPERATION AND GOVERNANCE

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1 I. Background VILLAGE OF ELMWOOD PARK OPT-IN ELECTRIC AGGREGATION PROGRAM PLAN OF OPERATION AND GOVERNANCE The Illinois Electric Service Customer Choice and Rate Relief Law of 1997 allows consumers served by Commonwealth Edison Company (ComEd) to purchase electricity supply from certified alternative retail electric suppliers (ARES). When consumers purchase electricity from an ARES, ComEd remains responsible for distributing electricity to them, and is also responsible for maintaining system reliability and safety, and facilitating monthly billing in a non-biased and cost-neutral manner. Industrial and commercial consumers largely adopted the use of the ARES supply option by 2007 while residential consumers did not. As of December 2009, only 185 of the 3.45 million ComEd residential customers were exercising their right to purchase electricity supply from competitive ARES providers. Public Act became effective on January 1, 2010, allowing local municipalities to serve as intermediaries on behalf of residential and small commercial consumers located within their municipal borders. This authority is termed electricity aggregation. Electricity aggregation allows local municipalities to negotiate electricity supply and service agreements on behalf of the residential and small commercial consumers located within their corporate borders. Several other states have passed similar electricity aggregation legislation, including California, Massachusetts, New Jersey, Ohio, and Rhode Island. To date, over 200 Illinois communities have established electricity aggregation programs to assist their residents with electricity purchasing. Due largely to certain long-term contracts entered into by the Illinois Power Agency in 2007, these municipalities have been able to secure electricity prices lower than those offered by ComEd on behalf of their residents. These municipalities have also been able to contract for better and more consistent consumer protections, and reserve the option to secure special services and supply options that meet the needs and policy objectives of the local community. Pursuant to Section 1-92 of the Act, the Village of Elmwood Park (Village) is authorized to aggregate the electric loads of small commercial and residential electricity consumers located within its municipal boundaries. As part of the electricity aggregation, the Village may select a retail electric supplier (or suppliers) and may enter into a service agreement (or agreements) to provide for the purchase of electricity and related services and equipment on behalf of its small commercial and residential electricity consumers. The Village Board has determined that it is in the best interests of the resident and small business owners of the Village to pursue an Electric Aggregation program on an opt in basis in light of the results of the March 20, 2012 referendum in which the requisite number of votes were not cast to authorize the operation of an opt out aggregation programon January 7, 2013, the Village Board 1 Public Act was codified as section 1-92 of the Illinois Power Agency Act (the Act). Page 1 of 10

2 approved Resolution No authorizing the Village Manager to pursue an Opt-In Electric Aggregation Program, whereby residents may voluntarily utilize the electricity supply contracts negotiated by the Village by affirmatively entering into a supply agreement ( opting in ) with the Village s selected supplier. The Village retained the services of a consultant to assist with planning and implementing the Village s electricity aggregation program (Program). The consultant s scope of work includes: assisting the Village in preparing the request for qualifications (RFQ) and the bid request from qualified RFQ respondents; advising the Village regarding the selection of the retail electricity supplier (or suppliers); and advising the Villages on public outreach and education related to electricity aggregation; coordinating implementation of the Program; and assisting in the monitoring of contract compliance with the supplier. With the assistance of its consultant, the Village will conduct the due diligence, contract negotiation, and competitive bidding to obtain the lowest prices for electricity that individual consumers are unlikely to be able to achieve on their own. The Village anticipates favorable results with regards to lower price, favorable terms, and the highest levels of customer service. The Village will not resell power through the Program. Rather, the Village will competitively bid and negotiate a Power Supply Agreement with one qualified and certified ARES that residents may volunteer to utilize. As part of its obligations under the Power Supply Agreement, the ARES will provide electricity supply to residential and small commercial accounts enrolled in the Program at rates negotiated by the Village. Also, the ARES will assist the Village in notifying residential and small business consumers about the Program, and facilitating the enrollment of individual electricity accounts into the Program. The ARES will also provide ancillary services for Program participants as described in this Plan. The Program will operate on an opt-in basis, whereby all eligible residential and small commercial customers of ComEd located within the Village will have the ability to participate in the Program. The Program will establish procedures by which parties may opt in to the Program and ensure that participation is completely voluntary, and consumers have the ability to participate without cost or fees. Aggregation efforts seek to lower the cost of electricity for residents and small commercial businesses. By combining the electrical load of all eligible consenting participants, aggregation can put competitive pressure on electric suppliers. This service results in lower electricity prices and greater savings than residents typically can individually attain on their own. By operating on an opt-in basis, the Village hopes to present a larger and more stable portfolio to potential bidders. Consequently, the Village hopes to receive more competitive and favorable offers from interested ARES. This Plan of Operation and Governance describes the Village s plan for: 1) Providing universal access to all eligible residential and small commercial customers and equitable treatment of applicable residential and small commercial customers; 2) Providing demand management and energy efficiency services to each class of customers; and, Page 2 of 10

3 3) Meeting any other legal requirements concerning aggregated electric service. With the help of its consultant, the Village will carefully evaluate and qualify ARESs. Upon completion of the requirements established by law, the Village will then solicit bids from qualified ARES. All proper bids will be considered. The apparent lowest responsible bid will be carefully analyzed with help from the industry consultants. Residents will be provided with information on the rates, terms and conditions of the proposed supply contract secured by the Village along with detailed information on how residents and small business owners can opt into the City s aggregation program. Within 60 days of receiving the bids, the Village Board will allow residential and small retail customers to commit to the terms and conditions of the bid selected. If the Village Board awards a proposed service agreement for the purchase of electricity and other related services, then customers that committed to the terms and conditions of the bid selected by the Village Board shall be deemed committed to the service agreement. Despite the switch in energy supply, ComEd is accountable for electricity reliability. ComEd will still operate and maintain the infrastructure required to distribute electricity as required by the Minimum Reliability Standards established by the ICC. Reports of outages, or other reliability issues should be directed to ComEd. Further, should the selected supplier default and fail to supply electricity per the terms of the executed contract, ComEd will step in and provide electricity at posted tariff rates. II. Definitions Aggregation Member A resident or small commercial retail account located within the Village of Elmwood Park that meets all of the eligibility requirements as listed in this Plan of Governance, and has properly opted into the Village of Elmwood Park Electric Aggregation Program. Default Tariff Service The rate charged for customers taking electric service from ComEd. ICC- Illinois Commerce Commission IPA Illinois Power Authority REC Renewable Energy Credits Retail Electric Supplier Market Participant who engages in the practice of reselling electricity to retail customers as certified by the ICC. Opt-in Process by which a resident may choose to participate in the Village of Elmwood Park Electric Aggregation Program. Small Commercial Retail Customer - nonresidential retail customer of an electric utility consuming 15,000 kilowatt-hours or less of electricity annually in its service area, or as otherwise provided by the Page 3 of 10

4 Electric Service Customer Choice and Rate Relief Law of 1997, as amended (220 ILCS 5/ et seq.) OR OTHER CONTROLLING State law, regulation or tariff. III. Bidding Process A. Hiring and Retaining an Aggregation Consultant. The Village Board has determined that it is necessary to hire an independent consultant to assist in all phases of the aggregation process. The Village Board awarded a contract to the Illinois Community Choice Aggregation Network, LLC (ICCAN) who will : 1. Develop and implement a process and system to receive customer data from ComEd and evaluate such data for eligibility in the program. 2. Prepare a Request for Proposals (RFP) to be provided to potential suppliers with an interest in supplying the aggregation data. 3. Assist Village officials in the drafting and preparation of all notifications and educational material to advance the aggregation effort. 4. Advise Village officials on any matter that arises in reference to the aggregation program. 5. Provide a Disclosure statement establishing its independence from any party with interest in the aggregation effort. 6. Adhere to the confidentiality rules outlined in Section II. 7. Disclose any fee paid to them by the supplier. 8. Advise Village officials on any major changes that will significantly impact the aggregation group for the duration of the contract. B. Accumulation, Verification and Implementation of Data. The Village Manager, through the efforts of the consultant, if necessary, will be responsible for accumulating, verifying and distributing all necessary data and customer information to the selected supplier. Below are the primary steps for that process: 1. Data Acquisition The Village Manager will be responsible for providing the selected supplier with all customer and account data. This base data will be provided by Com Ed, and aggregated by the Village manager or the consultant. 2. Data Verification - Acquired data will be reviewed internally by the Village Manager or the consultant for accuracy. 3. Data Confirmation Reviewed data will be corroborated with ComEd to determine an eligible customer pool. 4. Data will include: Customer name, address, utility account number, historical usage, demand, new enrollments/drops and any other information deemed necessary by either supplier or the Village. 5. The data base will be maintained and updated every 3 months to ensure accuracy. Page 4 of 10

5 IV. Eligibility Not all residents or small commercial businesses will be automatically eligible for participation in the Village Electric Aggregation Program. The following are the minimum requirements to determine eligibility. A. All customers must be located within boundaries of the Village of Elmwood Park. B. All residential customers are eligible to participate in the Program. C. Nonresidential customers must have an annual electrical demand not exceeding 15,000 kilowatt hours. D. Special rate classes will be evaluated on an individual basis to determine eligibility in the program. V. Formulation of RFP With guidance from the Village, the consultant will prepare an RFP to be distributed to qualified suppliers who may have an interest in supplying the City s aggregation group: A. Term - The Service agreement shall be for an initial term of at least 12 months and not more than 24 months, unless otherwise specified. Renewal of the service agreement will be subject to review and approval of the Village Board. B. Product Structure Product structure will be fixed price full requirements. C. Product Details The Village reserves the right for all charges to be detailed by the supplier including but not limited to: Product Mix, REC s, Capacity Charges, RUCC charges, ancillaries, losses, credit/collection costs, etc. D. Customer Credit - The supplier will supply all eligible members of the Village Electric Aggregation Program without regard to a customer s credit. E. Special Rates The supplier may be required to provide special rates similar to those of ComEd. Such rates must be competitive with ComEd programs. F. Billing The alternative retail supplier will be responsible for managing the billing process. VI. Supplier Qualifications A. Supplier must be certified with the Illinois Commerce Commission. B. Supplier must be registered with ComEd to do business. Page 5 of 10

6 C. Agree to hold harmless the Village of Elmwood Park from any liabilities arising as a result of the Village s Electric Aggregation Program. D. Supplier must demonstrate creditworthiness, as certified by two credit rating agencies or provide an acceptable letter of credit worthiness if it fails to meet the former condition. The Village reserves the right to reject or approve the credit worthiness of any potential supplier. E. Maintain a technologically sound and secure database of all customers in the program as well as maintain an EDI network that is fully compatible with ComEd and has appropriate data backup. F. Supplier will provide at the Village Manager s request, reports on number of members, current savings analysis, and other info required by Village Manager. G. Develop and implement an educational plan that is easily accessible to all eligible members of the Village s Electric Aggregation Program through mailings, websites, telephone call centers and newspaper articles. H. Maintain a toll-free call center that is capable of handling the calls of aggregation members to address: 1. Customer support 2. Billing inquires 3. Complaints 4. Questions about electricity supply I. Comply with all laws and regulations of the State of Illinois. J. The supplier will ensure that the aggregation group is at all times in accordance with both local and state laws in regards to the aggregation effort. They will keep Village in good standing as an aggregator. K. Agree to all confidentiality provisions provided in this Plan. VII. Plan Requirements Pursuant to the Act, the selected supplier must: A. Provide for universal access to all applicable residential customers and equitable treatment of applicable residential customers B. Describe demand management and energy efficiency services to be provided to each class of customers C. Meet any requirements established by law concerning aggregated service offered pursuant to this section. Page 6 of 10

7 VIII. RFP Process A. All bids will be submitted in compliance with the terms and conditions as set forth by Village of Elmwood Park and the State of Illinois. The Village reserves the right to review, reject or accept any or all bids received. The Village will only accept bids from vendors who meet the qualifications reflected under Secion VI. B. The Village Manager will review all bids with the aid of an independent consultant, if necessary. C. The Village has no obligation to select a bid. The Village reserves the right to refuse any or all bids at any time and for any reason. IX. Bid Selection A. The Village will select a bid that, in its sole discretion, best serves the interests of its residents and small business owners. It has no obligation to select a bid. B. All vendors will be subject to the same terms and conditions. Bids that are accompanied by or require changes to the terms and conditions set forth by the Village will be deemed nonresponsive. C. All vendors will be required to submit electronic bid submissions to the bid administrator in accordance with the RFP.. There will be a public bid viewing / opening. Vendors will be required to disclose any financial interest held in their firm by any elected official of the Village or employee having contract management authority or a role in the bid process. D. In the event no bid is selected, the Village reserves the right to revise and re-issue the RFP as it determines appropriate. X. Education The selected supplier will develop and implement an educational program for Village residents and small business owners on the aggregation process. The program shall clearly show the steps of municipal aggregation and the timeline necessary to complete such steps. Further it will provide detailed information on the impacts of the aggregation program to include customer rights, savings analysis, reliability, and responsibilities of both the supplier and ComEd. Approval of such program will be authorized by the Village Manager. XI. Operation of Aggregation Group A. Opting In. The supplier will send a notification to all Village residents and small business owners, via business reply mail, of the opportunity to opt into the Village s Electric Aggregation Program, the material terms and conditions of the service agreement, a firm date for commencement of the supply contract, instructions on how to properly opt into the Program and a deadline for customer action. The Village Manager will provide the supplier with the Page 7 of 10

8 City s official logo or seal in an acceptable format. The Village official logo or seal shall be printed on the outside of the envelope as well as on the letterhead of the opt-in notification. If a resident or eligible small business owner chooses to opt in and receive the benefit of the negotiated rate, they must give notice of their intent to the selected supplier no more than 30 days after the postmark date of the notice. Residents can opt-in and opt-out of the program for the entire term of the contract; however, after the first 30 days, the rate will fluctuate with the market. The Village s consultant will verify and document that the market rates are fair and consistent with the then current conditions. Means of opting in should include business reply mail, toll free numbers and websites. There will be no fee or penalty for opting in or opting out. The supplier will send timely and proper notice to ComEd of all residents that opt into the Village Electric Aggregation Program. The supplier will not solicit door-to-door. Residents will be provided at least the levels of renewable energy resources that Commonwealth Edison provides. The vendor will be required to provide additional renewable energy to those participants who request it. Rates for this additional renewable energy will be negotiated by the vendor and the individual participant. B. Price Match. If the Utility s Price to Compare for the Account(s) rate class are set below the fixed rate during the term of the agreement, the Retail Electric Supplier will either: (a) lower the fixed rate to match that of the Utility s applicable Price to Compare; or (b) terminate the agreement without damages or early termination fees to either party. Utility s Price to Compare shall mean ComEd s Price to Compare for the applicable rate class, as posted on the ICC website ( which includes ComEd s electricity supply charge plus ComEd s transmission services charge, but shall not include ComEd s purchased electricity adjustment. C. Move Ins. Customers moving into the Village to a residence with an existing electric meter will have the opportunity to be included in the Program. The same terms and conditions that apply to the aggregation group will apply to these customers. Customers moving into the Village in new construction or where there is no existing electric meter will not be automatically included. If a resident moves into the Village under these conditions and wishes to participate they will be given rates and terms quoted by the supplier at that time. The same terms and conditions that apply to the aggregation group are not guaranteed to new customers. The Village s consultant will, however, verify and document that the rates quoted to the new customers are fair and consistent with the then current market conditions. D. Move Outs. Residents moving out of the Village will discontinue service. No fee or penalty shall be assessed by the supplier for termination of supply due to moving out, nor shall supplier attempt to recoup these costs from any remaining customer. Page 8 of 10

9 E. Moving within the Village. Residents or small business owners that relocate within the geographic boundaries of the Village shall receive the same rate, terms and conditions as those at their previous location within the Village. The supplier shall assess no fee for customers moving within the boundaries of the Village. F. Development and Maintenance of Customer Records. The ICC requires all municipalities, after adoption of this plan, to submit a Direct Access Request and Government Authority Aggregation Form to ComEd. Once received ComEd will generate an eligible customer pool conditional to the criteria previously established in this document. ComEd will provide the requested customer list within 10 business days. The supplier will create and establish a sound database to include but not limited to: ComEd account number, supplier account number, and address rate class and demand and usage history. Records will be kept and maintained for 2 years after the end of the contract, and the complete database will be sent to the Village Manager upon request. G. Confidentiality. All information and records generated by ComEd, the Village, the consultant or the supplier, shall be privileged information to those parties. All customer information will be stored in secure databases. No party may disclose at any time during or any time after the term of the contract, any customer information to any outside party unless required by law. H. Billing. Consolidated billing, when possible, shall be a part of every supplier s bid. Customers will receive one bill from ComEd for both the supplier s portion and ComEd s distribution portion. Customers will adhere to ComEd s billing procedures and will be subject to all terms and conditions of both ComEd s and suppliers late fees and nonpayment conditions. The Village shall not be liable for any of the late or non-payments of participants in the Village Electric Aggregation Program. The supplier shall include, as part of their quote, costs for lost collections and no other charges may be assessed by the supplier. Costs for lost collections will be included as criteria for selection of a supplier. I. Termination of Service 1. Early Termination The Village reserves the right to terminate service before the end of the contract on account of: a. Disclosure of privileged customer information. b. Unsound business practices as defined in the service agreement with the supplier. c. The revoking of any of the supplier s licenses, or ability to conduct business in the State of Illinois. d. ComEd s termination of business with the supplier. e. Unsound billing practices or procedures as defined in the contract with the supplier. f. Inadequate customer support as outlined in this Plan of Governance. g. Any other breach of contract by the supplier. Page 9 of 10

10 Upon early termination of the contract, the Village will either inform ComEd of its desire to return to the default tariff rate or negotiate and execute a contract with an alternate supplier. 2. End of Contract term Electricity supply shall terminate on the date specified by the contract. The Village may or may not choose to renew the contract with agreed upon terms. If the Village chooses to not renew the contract and has not given adequate notice to the supplier, electricity supply will continue on a month to month term at the best competitive rate the supplier can offer. 3. Notice of Termination Notice of termination must be given 30 days prior to the end of the contract. Early termination due to any reason listed above or found reasonable by the Village will not be subject to such time limitation. 4. Notice of Early Termination Early termination due to any reason listed above or found reasonable by the Village will be defined in the contract with the supplier and will be subject to the following terms: a. Written notice to the supplier of reason to terminate service. b. Parties will have 7 business days to resolve issue in question. If not resolved to the satisfaction of the Village within 7 business days, the Village s notice of early termination shall be effective. c. Further action desired by either party will be conducted through the respective Illinois court. I. Miscellaneous. The Village reserves the right to modify or amend any of the provisions of this document consistent with any laws or regulations governing the aggregation program. XII. INFORMATION AND COMPLAINT NUMBERS Copies of this Plan will be available from the Village free of charge at[enter WEBSITE]. Any electric customer, including any participant in the Village s Program, may contact the Illinois Commerce Commission for information, or to make a complaint against the ARES or ComEd. The ICC may be reached at Page 10 of 10