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2023/01/30 - Mayor's Column: Utility Rates

­“AN OPEN DOOR TO O’FALLON”
A WEEKLY NOTE FROM MAYOR HERB ROACH
­­­

By now, everyone has seen the dramatic rate increase in our electric bills. The rates for the first 800 kilowatts per hour have jumped by over 100%.  You may ask why this is happening.  There are several reasons:

  1. There are increased exports of U.S. Natural Gas to Europe, which have been brought on by geopolitical tensions.
  2. The State of Illinois and the Federal Clean Air Act have been adopted which require low carbon transition.
  3. To reduce carbon emissions, there has been the early retirement of many local coal-fired electric generating plants which puts more need for natural gas plants. Our region had relied heavily on coal-fired plants.
  4. This is combined with a lack of planning of the electrical grid to handle new distribution needs for increased demand for electricity.

As much as we all dislike the increase, I can assure you that we are doing what we can to keep your bills as low as possible. The City’s ability to set electric rates does not exist. We do not control the cost of electrical production or transmission. However, we can attempt to secure a better rate by joining with others to utilize a larger purchasing powerj. Through the Municipal Electrical Aggregation Program, the City of O’Fallon and 31 other municipalities have joined together to secure a lower fixed rate.  Due to the tight supplies and volatile market, fewer companies participated in the bidding process than in previous years, but we were able to achieve a lower price than that offered by Ameren.

We were able to lock in a rate with Constellation New Energy for 12.2 per kWh with no increases for 22 months.  The current rate from Ameren is 11.833 cents per kWh + .478 (purchase energy adjustment) or a total of 12.31 per kWh. Ameren usually has an increase during the summer starting May 1, and if you stay with Ameren you will need to remain with them for 12 months.  With Constellation you can change electric suppliers at any time.

If you want to consider other alternate supplier deals beyond the Municipal Electric Aggregation Program, we advise you to be cautious.  Be careful about getting lured into a long-term bad deal that is offered to you over the phone, by mail or a door-to-door salesperson.  A company may offer a low introductory rate that will skyrocket after a short period of time, and you may be locked in.

As residents of O’Fallon, you should always be able to reach out to your elected officials and ask questions about what is happening in O’Fallon. Having open communications is important to me and something I care very deeply about. Thank you for reading, and please remember, my door is always open.