Aldermen amend agreement with consultant to allow for more flexibility in electrical pricing

QUINCY — The Quincy City Council’s consulting agreement with SIMEC, LLC, was amended during Monday night’s meeting.

SIMEC President Reg Ankrom sent a letter to the city last week explaining how the competitive market in electricity has been volatile during the last three years. 

“In our two recent requests for proposals (RFPs), we invited electricity suppliers to work with us in our attempt to find ways to reduce the risks behind that volatility,” Ankrom wrote. “Homefield Energy of Collinsville was the only supplier to respond, and we worked with Homefield to eliminate capacity risk. That effort reduced electric costs for one group of SIMEC communities to 8.3 cents per kilowatt hour.”

Ankrom said his proposal would give SIMEC the flexibility to enter the market for pricing at any time as opposed to the lengthier schedule the current process requires. 

“We use a series of static data points to schedule our entry into the market. That usually takes several weeks,” Ankrom wrote. “Homefield has agreed to allow us access to its expertise, timely data and forecasts to be more nimble in market entry. Homefield would provide such expertise for 53 months in exchange for supplying the City of Quincy’s electric aggregation program during that time.”

Ankrom said the proposal would provide an important tool for obtaining the best rate available at the time the market offers it.

Ankrom told aldermen that he hasn’t seen the kinds of volatility in the market that have been seen in the past couple of years.

Alderman Dave Bauer (D-2) asked if customers would have to “opt out” of the city’s agreement with an electrical supplier to get the Ameren rate — if it were lower.

“There’s not really another option,” Ankrom explained. “It’s simply a tool that we get. We will have to do the same thing we’ve always done, which is to bring back recommendations to the city for the contract and get your approvals.

“We will continue to put our RFPs, even though we would have this agreement with Homefield. We will test it in the next market. Our contract with Quincy ends in October. We’re in the market now looking for pricing, and when we have a price point that we think will give us a good rate, we will enter the market.”

Bauer said he believed the city should discontinue its agreement with SIMEC.

“If people want to sign up for it, let them sign up for it,” he said. “It should be an opt-in, not an opt-out thing.”

Ankrom said working with Homefield will allow SIMEC to “deal more rationally in a very volatile market” by working with a company constantly monitoring electrical rates.

“Being in business with a partner watching prices change hourly gives us the ability to know that within a couple of weeks, they might suggest that now’s a good time to be looking at the market in two to three weeks rather than six weeks out,” he said.

Rather than dealing with 12-month, 24-month or 36-month contracts, SIMEC would recommend shorter-term contracts because of the volatility.

Ankrom said often he gets a price at 10 a.m. and a decision needs to be made by 5 p.m. When the Municipal Aggregation Electricity Program was created 11 years ago, the City Council gave the mayor the authority to sign a contract and then bring it to the aldermen. 

Ankrom said of the city’s “13,000 or 14,000 customers, between 4,000 and 5,000” opted out of the rate now offered by Constellation.

“That’s kind of upsetting because it’s way cheaper,” Kelly Mays (R-3) said. “So that’s why I think, for the city, it’s kind of dangerous. It’s one thing to provide people to save money, and it’s another thing to force them to pay more. That’s kind of what we did.”

“We do have to remember too all the good years we did have when we did have the citizens saving money,” Eric Entrup (R-1) said. “This is the one year that it didn’t work out, but there were a lot of years when we were on the right side of it.”

Aldermen approved the proposal 13-1, with Bauer voting no.

In other action, aldermen: 

• Learned the May 28 meeting of the City Council will be held at the Quincy Public Library.
• Approved a special event application from the St. Francis Parish Picnic Committee requesting permission to hold its annual picnic on June 8.
• Approved a special event application from Brianna Rivera, executive director of the District, requesting permission to hold Blues in the District concerts on June 14, June 28, July 12, July 26, August 9 and August 23. 
• Approved a special event application from Win One LLC requesting permission to hold the Grand Prix of Karting June 8-9 in South Park.
• Gave Fireworks Authority Inc. requesting permission to hold fireworks displays on July 4-5 at Quinsippi Island, approximately 9:30 p.m.
• Approved implementation of a 30-minute parking zone on the north side of Maine, beginning at a point 200 feet east of the center of North Ninth and extending east a distance of 130 feet. 
• Approved implementation of a 20-mph speed limit for all streets in the Lake Ridge and Alexandria Heights subdivisions. 
• Approved implementation of four-way stops at the intersections of South 38th and Newcastle Drive, South 38th and Stone Crest Drive and Wilmar Drive and North Wilmar. 
• Approved appointments by Mayor Mike Troup of Gary Sparks to the Quincy Housing Authority Board of Directors and Ronald Dreyer to the Quincy Police Pension Fund’s Board of Trustees.
• Amended a previously approved resolution on May 13 and approved the purchase of 12 sets of bunker gear for $40,926.24 from AEC Fire Safety & Security, Inc.
• Approved a $7,599.17 payment to First Arriving to renew the annual subscription. First Arriving is a backup notification system to supplement radio dispatch communications with the ability to integrate with other department software such as First Due, Vector Solutions, Vector Check It and Microsoft 365.
• Authorized a lease agreement for second-floor studio space at 433 Hampshire to Peggy Ballard for one year with a rental rate of $500 per month.
• Approved an ordinance granting a special use permit for a golf pro shop at 830 S. 36th that includes retail sales, a commercial kitchen, a bar/tavern and video gaming terminals and to obtain a liquor license to allow for alcohol sales and to operate video gaming terminals. 
• Approved an ordinance to add territory on Ellington Road for the $40 million United Alloy facility to the Quincy Adams Brown County Enterprise Zone and amend the intergovernmental agreement.