Board Passes Proposed Agreement with People's Energy Projected to Save $4 Million Annually
New Contract Locks in Electricity Rates with Flexibility to Opt Out
Release Date: 03/15/07
The Chicago Park District Board of Commissioners approved a recommendation to switch electricity providers from Commonwealth Edison (ComEd) to People’s Energy Services at yesterday’s board meeting at the Park District, 541 N. Fairbanks Ct. The proposed contract is projected to save the Park District about $4 million annually until the agreement expires on December 31, 2009.
“We are committed to running our facilities as efficiently as possible,” said Chicago Park District General Superintendent and CEO Tim Mitchell. “This new agreement is cost effective and flexible, providing protection against market fluctuations.”
At the beginning of this year, the Park District’s current electricity provider implemented a rate hike of approximately 22 percent. Under the proposed agreement with Peoples Energy, the Park District has a fixed price or floating index price option. This option protects against market volatility by locking in the cost of electricity per kilowatt hour at the time of enrollment. If market conditions change, the Park District can opt out of the agreement with 30 days notice.
Compared with the current agreement, locking in with People’s Energy’s at present electricity rates would save the Park District about $4 million for each year of the agreement. The total cost of the contract is not-to-exceed $30 million during its entire term.
The contract calls for People’s Energy to authorize the Energy Resource Center at the University of Illinois at Chicago, the State of Illinois’s electricity managing agent, to manage the Park District’s electricity accounts. Its duties would also include offering consolidated billing and account monitoring, and providing both technical consulting and advice on risk management issues. These services are provided for a fee equal to .5 percent of the invoice value of electricity usage and transmission services provided during each billing period, but are not to exceed $75,000 annually.
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