Response to a Facebook comment: Administrative Fees and the Future

Some Communities that we have worked with in the past and those that we are working with currently, have elected to receive an administrative fee, or civic donation, as we sometimes refer to it as. Why? There is a great deal of work required on the local government's side in following the steps required to efficiently carry out the program. The fee is directly proportional to the number of residences and small business that enroll in the program - and the larger the community, the more work that is involved. Municipal officials are spending a great deal of time on their community's behalf to bring them savings; savings that would otherwise not be as substantially available using any other offer.

Additionally, it is important to understand that there are other fees which the municipality may have to incur, most notably attorney fees. Governments that decide to take the fee are free to do with it as they wish, though it is fair to say that many are putting these funds to good and constructive use, i.e., lighting efficiency upgrades that will save money in the long run, hiring new employees and/or retaining current ones. When daily headlines talk about unemployment numbers, this is a program that might actually have the impact of lowering them.

With regard to how this program could ultimately become a losing proposition for communities and end up costing them more in the end, let us be clear in saying that our firm has a solid performance record in carrying out our promises, and the first promise we made to each community began with an acknowledgement - that the savings which are available now will not be there forever. Illinois utility rates are expected to come down in the next several years, as indicated by the Illinois Power Agency (IPA) and the Illinois Commerce Commission (ICC). These are the organizations that buy the power for the utilities and the government organization responsible for utility oversight, respectively. This has been discussed in depth with each participating municipality and as a result, contract terms have been kept to a conservative 24-month duration. It should be noted that one of our most important contract terms is that, should the utility rate ever dip below the rate achieved via municipal aggregation, the winning supplier will be required to match that rate and/or return the customer to the utility without penalty of any kind. Simply put, this is a "no lose" situation for governments and their respective communities. That's why so many are moving so quickly towards municipal aggregation right now, and why it may very well become a model for the country. To be fair, however, reevaluation of the program will most certainly be required. Also be aware, that if a community decides to renew it's contract, residents will have another oportunity to opt-opt at that time.

Lastly, we will say that working with these communities directly, in nearly every case, we have been enormously impressed at the earnest efforts these government employees have made. They are truly looking out for their community's best interests and we should recognize and applaud them for that!