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CITY OF WEST CHICAGO
INFRASTRUCTURE COMMITTEE
AGENDA ITEM SUMMARY
ITEM TITLE:
AGENDA ITEM NUMBER: ule ea AEE
APPROVAL OF CITY ADMINISTRATOR'S EXECUTION | o.
OF TWO YEAR CONTRACT WITH DYNEGY ENERGY UMBER: ___
SERVICES, LLC FOR THE SUPPLY OF ELECTRICITY, | commITTEE AGENDA DATE: April 6, 2023
JUNE 1, 2023 — MAY 31, 2025 COUNCIL AGENDA DATE: April 17, 2023
STAFF REVIEW: Mehul T. Patel, P.E., CFM — Director of Public Works SIGNATURE Mil Ac
APPROVED BY CITY ADMINISTRATOR: Michael L. Guttman SIGNATURE
ITEM SUMMARY:
Since January 2007, as a result of the electric utility deregulation law passed by the State of Illinois in
1997, the City of West Chicago has contracted for the supply of electricity from a third party supplier for
electric to be supplied to the City's Water Treatment Plant, all Well Stations, and all Sanitary Lift Stations.
The distribution of electric continues to be provided by ComEd.
Working with David Hoover, who formed a cooperative known as the Northern Illinois Municipal Electric
Cooperative (NIMEC) that represents over 30 municipalities, alternative pricing is obtained via
competitive bid from four third party electric suppliers. In the past, the competitive bids were then
compared with ComEd’s rates to determine which pricing yields the most significant savings for the City.
Now, however, ComEd no longer offers fixed rates for medium and large accounts like ours. Therefore,
the City is forced to seek competitive bids or pay ComEd's floating rate, which is not recommended, as
the floating rates are inflated and change hourly.
On February 20, 2023, City Council approved Resolution 23-R-0003 authorizing the City's participation in
NIMEC and authorizing the City Administrator to approve a contract with the lowest cost electricity
provider. On March 2, 2023, NIMEC obtained bids from four suppliers (i.e., AEP, Dynegy, MC Squared,
and Constellation). Dynegy Energy Services won the bid and on Thursday, March 2, 2023, the City
Administrator executed a two year contract (June 2023 thru May 2025) with Dynegy Energy for 0.05836
$/kWh for contract year one from June 1, 2023, to May 31, 2024, and for $0.05809 $/kWh for contract
year two from June 1, 2024, to May 31, 2025. The City has historically signed a three year contract but
staff based on various parameters made a recommendation to sign a two year contract. The existing
contract expires on May 31, 2023, and the City's current rate is $0.04834 $/kWh. Under the new
contract, the City will be paying approximately 20% more for energy than the previous contract. The
increase is due to the energy shortage and escalated inflation.
ACTIONS PROPOSED:
City Council approval of the City Administrator's execution of a two-year contract with Dynegy Energy
Services, LLC for the supply of electricity for the City's Water Treatment Plant, all Well Stations, and all
Sanitary Lift Stations.
COMMITTEE RECOMMENDATION:
The Infrastructure Committee voted 6-0 for approval.