Oak Park trustee explains flawed auction that led to non-green energy

April 25, 2014 by  
Filed under Green Energy News

Oak Park’s controversial choice of non-green electricity as the village’s default is the result of a saga that began in January, according to Trustee Adam Salzman.

At that time, KC Doyle, the village’s former sustainability director who since left to take a similar position with Lake County, recommended Oak Park use a “reverse auction” to get the best possible green-energy contract, Salzman said.

The Village Board unanimously supported the idea but received just one bid, from Integrys, the village’s previous supplier, with a “steep” price hike of 8 cents per kilowatt hour from its 2011 rate, he said. That increase would have yielded an average bill increase of $15 to 20 a month, Salzman said.

“It was troublesome to many of us that we only had one response bid come back from a renewable energy marketplace that many of us know provides a wide range of options at a variety of different price points,” he said in a prepared statement. “Simply put, to only have received a single proposal in response to our solicitation seemed very strange.”

When the board met to vote on the bid on April 7, the village’s energy consultant told trustees at the meeting that the auction was compromised because Integrys misplaced a decimal point, accidentally bidding .008 of a cent per kilowatt hour, instead of the intended 8 cents per kilowatt hour, Salzman said.

“Needless to say, no one was willing to try to compete for a lower bid after seeing that mistake,” he said. “Somehow Integrys got it corrected to roughly 8 cents per kilowatt hour before it found its way into our board packet.”

The board declined to approve a bid “on the basis of an auction that didn’t actually happen,” Salzman said. “Without a legitimate auction, we had no idea what the market could provide for us. So the only responsible thing to do was demand a re-run of the auction.”

Oak Park was required to complete that rebid process by April 11, he said. Otherwise, residents would not have time to opt in or out and would automatically return to ComEd as their default supplier, Salzman said.

“So that is how we ended up with a Friday morning meeting at 7:30 a.m.,” he said. “We simply had no choice. It was the absolute latest we could meet to allow for 48 hours notice, while still getting in under the wire to avoid us getting kicked back onto ComEd.”

Despite the rebidding, Oak Park again received only one green energy bid, also from Integrys, with an increase to 7.9 cents per kilowatt hour, Salzman said. That rate was not competitive with those in renewable energy marketplace, he said.

Combined with ComEd’s impending rate increase for the use of its transmission lines, that rate would have yielded average monthly bill increases of $15-$20, Salzman said.

“It is unfortunate that Constellation did not offer a more cost-effective green option as part of their bid,” he said. “I don’t know why they didn’t. If they had, I suspect this board would have voted for it.”

Unfortunately, Oak Park is legally prohibited from considering an alternate bid at this point in the process, Salzman said.

Comments are closed.