TROY CITY COUNCIL

COMMITIEE MEETING NOTICE

COUNCIL CHAMBERS, CITY HALL
100 S. MARKET STREET, TROY, OHIO

Monday, Aug. 15,2016, 6:00PM

Utilities Committee

(Tremblay [Chm .], Terwilliger, Twiss)

1. Provide a recommendation to Council regarding authorizing the Director of Public Service and
Safety to enter into a three-year opt-out electric aggregation agreement with FirstEnergy Solutions
commencing May 2017.

Other Committees/items may be added.

8-9-2016
Cc:

Mayor
Mr. Titterington
Mr. Kerber
Mr. Frigge
Department Heads
Chamber of Commerce
media

Patrick E. J. Titterington

P. 0. Box 3003
Troy, Ohio 45373
www.troyohio.gov
phone: {937) 335-1725
{937) 339-8601
fax:
patrick .titterington@troyohio.gov

MEMORANDUM
/).

TO:

Mrs. Baker, President of Council

FROM:

Patrick E. J. Titterington, Director of Public Service and Safety

DATE:

July 28, 2016

SUBJECT:

AUTHORIZATION
OF
ELECTRIC
RRSTENERGYSOLUTIONS

AGGREGATION

AGREEMENT

WITH

RECOMMENDATION:
That Council authorizes the Director of Public Service and Safety to enter into a three-year Electric
Aggregation contract with FirstEnergy Solutions effective May of 2017. The service will continue to be on
an opt-out basis with no cancellation fees.
BACKGROUND:
In 2011, the citizens of Troy approved a plan to create a governmental opt-out electric aggregation
program for customers (households and small commercial businesses) located within the corporate
limits.
FirstEnergy Solutions has provided energy savings and quality customer service for the citizens and
businesses of Troy since April 2014. The residents and businesses of Troy (who have not opted out of the
program) have realized a total savings of $2,755,971 during the first twenty-one months of this program,
through January 2016. This equates to an average annual savings of $508.00 per residential customer
and $1,804.00 per commercial customers. The current Agreement with First Energy Solutions will expire in
April 2017. Due to the current favorable market conditions, the City's consultant regarding electric
aggregation, Schneider Electric, recently advised the City of Troy to begin the renewal process. With the
assistance of Schneider Electric, proposals to provide the opt-out electric aggregation program were again
solicited and reviewed. The proposal of FirstEnergy Solutions continues to be the lowed bid at $0.0560
kWh for a thirty-six month agreement. Over the term of the new three-year agreement, it is estimated Troy
residents and small businesses will save an estimated $3.3 million dollars in electric costs. This savings
equates to an average annual savings of approximately $178.00 per resident and $739.00 per small
business depending on usage.
DP&L will continue to be the electric utility distributing the power, and customers will receive only a bill
from DP&L, but that bill will reflect FirstEnergy's power generation rate unless the customer wishes to
exercise the opt-out provision and select another generator. Over-sight of the agreement with
FirstEnergy would be provided by the consultant, Schneider Electric, through the terms of the agreement
with that company.
We are recommending a new three-year agreement with FirstEnergy Solutions.

ELECTRIC AGGREGATION AGREEMENT

PAGE TWO

To discuss how Schneider Electric is compensated for providing the City with the necessary expertise in
soliciting and reviewing proposals, in 2012, The City of Troy paid Schneider Electric an initial fee of
$32,000 for the first year of the prior agreement. The Schneider Electric annual service cost in years two
and three of the prior agreement has and will be approximately $1 .00 per residential customer and $2.25
per small business customer. This cost was imbedded into the new rates negotiated with First Energy
Solutions.
For assisting the City with the agreement for electric aggregation that will commence May 2017, the first
year fee of $10,000 has been paid directly by the City to Schneider Electric. The remaining annual service
fee of $3.09 (average based on energy usage) per residential customer and $7.44 per small business
customer will be imbedded in the negotiated rate beginning with a new agreement effective May 2017
through December 2019. The imbedded charge is a very small percentage of the average annual savings
realized by each customer.
REQUESTED ACTION:
It would be appreciated if you would assign to a Committee of Council to consider authorizing the Director
of Public Service and Safety to enter into a three year opt-out electric generation agreement with
FirstEnergy Solutions commencing May of 2017.

cc:

Mayor Beamish
T. Funderburg