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Power Line/ Pipe Line Quarterly Newsletter
Summer 2004
Dr. David F. Grace, President
Lincoln SD 156
Illinois ASBO
Dr. Michael A. Wright, Vice President
Morris SD 54
IASA
Mr. Luke V. Glowiak, Treasurer
Sycamore CUSD 427
Illinois ASBO
Mr. Ralph E. Grimm, Trustee
Canton Union SD 66
IASA
Dr. Bill Mattingly, Trustee
Streator Twp. HSD 40
IASA
Mr. Tom Maloney, Trustee
Chicago Public SD 299
Illinois ASBO
Dr. Mike Williams, Trustee
Scott-Morgan CUSD 2
IASB
Mr. Gene Osmanski, Trustee
Ridgeland SD 122
IASB
Mr. Dan Romito, Trustee
IASB
Dr. Ronald Everett, Trustee
Executive Director
Illinois ASBO
Dr. Michael D. Johnson, Trustee
Executive Director
IASB
Dr. Walter H. War eld, Trustee
Executive Director
IASA
Sponsored by:
Board of Trustees
www.illec.org
Presidents Perspective
By Dr. David F. Grace, President, Superintendent, Lincoln Elem. SD 156, Calumet City, IL
Dear Members,
Power Line/
Pipe Line
tel: 815.753.9840 email: iec@niu.edu
Midwests Largest Energy Purchasing Pool
I hope that all of you have had a very
peaceful and productive summer and are
now ready and recharged for the return
of your students. It has been a very busy
summer for the IEC as well, with our
continuing growth with both the natural
gas and electric supply. To date, we are
supplying electricity to more than 353
school districts. Our yearly billed supply
now exceeds 460,000,000 KWH. This rep-
resents growth of more than 60,000,000
KWH per year and approximately 50
more districts than last year at this time.
In Natural Gas we are currently supply-
ing approximately 88 school districts
more than 26,000,000 therms. The IEC
schools are saving signi cant $ in both
electric supply and natural gas. At a time
when we are seeing our revenues shrink-
ing, it is really important to be able to
tell our Boards that we have been able
to reduce costs without impacting our
students.
Electric Supply in our Regions:
In the ComEd region, we have negotiated
a new supply contract with Ameren En-
ergy Marketing and are seeing signi cant
savings in all the IEC supplied districts.
We have been successful in securing a
supply contract that will supply our
schools with electricity at signi cantly
lower costs than will be commercially
available to other schools. Thanks again
for your faith in your organization.
In the Ameren region, we are in the sec-
ond year of a two-year supply contract
that is showing savings similar to last
year and has enabled us to continue to
expand our school district participation
in this region. Since there is no PPO in
this region, our supply is again the best
possible option to secure savings for
your district in the Ameren Region.
Check with Kristi Fitzanko at Ameren
Energy Marketing at 309-677-5246 or
call Ronald C. Steigerwald at 847-567-
3051 for answers to your questions.
In the Illinois Power region, we are con-
tinuing to supply electricity under the
PPO and continue to pursue indepen-
dent supply for our member districts.
We have not forgotten the other re-
gions of the state and are continuing to
work toward the time when we will be
able to provide electric supply to those
regions. We have approached legislative
initiative and regulatory changes and
have been unsuccessful to date in being
able to penetrate these markets. How-
ever, we keep trying and are con dent
that we will be successful at some time
in the future.
Natural Gas Supply in our Regions:
We continue to grow in our natural
gas supply as well. We continue to
gain market share in a mature market
and provide more savings than other
marketers. As we move forward, our
mission is to provide energy services
to schools in Illinois, enabling them
to save money on energy costs. As we
are successful in meeting these energy
needs of schools, we have continued to
grow. As we have seen in our electric
supply purchases, competition has
enabled school districts to experience
signi cant savings.
As we begin another school year, let
me wish you all a great and prosperous
2004-2005! Illinois Energy Consortium, An Illinois Not-for-Pro t Corporation, Summer 2004
2
continued on page 3
Does Electricity Also Come
From Cows?
By Louie Ervin, Executive Vice President, Latham and Associates, The IEC Energy Advisor, Cedar Rapids, IA
The Illinois Energy Consortium
(IEC) was created to make it simple
for schools to achieve bene ts from
the deregulated retail electric mar-
ket. The IEC has been so successful
in making it simple to purchase
retail electricity that it needs to re-
mind school participants of the real
source of its electricity and how it
gets delivered to your doorstep.
Heaven forbid that any Illinoisan
would have the myopic view of the
New Yorker who was interviewed
several years ago on national televi-
sion. At that time, dairy farmers
across the country were striking
because of low milk prices and dem-
onstrated in Washington by pouring
milk down the sewer by the tanker
truckload. When the New Yorker
was asked how she felt about the
dairy farmer strike, she responded:
It really doesnt concern me because I
buy my milk at the store.
Much like the grocery store, the IEC
purchases wholesale electricity for
sale at retail. In a metaphoric sense,
the upstream supply chain goes back
to the individual power plants (or
the metaphoric cows). The midwest
wholesale electric market underlies
the Illinois retail electric market. The
wholesale electric market and power
transmission are regulated by the
Federal Energy Regulatory Commis-
sion (FERC), which must comply
with federal laws such as the Federal
Power Act. The retail market and
intra-state power distribution are
regulated by the Illinois Commerce
Commission, which must comply
with the Public Utilities Act and
other state laws regarding deregula-
tion of electricity in Illinois.
Both the wholesale and retail mar-
ket rules are in a constant state of
ux. For example, the FERC issued a
series of orders to move the whole-
sale electric industry toward mar-
ket-based prices and has pushed for
creation of Regional Transmission
Organizations (RTOs) and Indepen-
dent System Operators (ISOs) with
real-time electric prices for balancing
supply and demand. Frankly, this
process of school retail supply takes
reliable, ef cient specialists that are
in these markets every day. The in-
dustry specialists that work for the
IEC understand the supply chain
from generation, transmission and
delivery to your meter, which is the
electric equivalent of the supermar-
ket cash register. Okay, you get the
point - there is much to complet-
ing a wholesale power transaction
before even addressing the Illinois
retail delivery rules and regulations.
Maybe it would be easier to just
purchase electricity from the grocery
store rather than from the cow!
That is where the IEC comes in for
it's participating school members.
Certainly, as educators, school dis-
tricts could, with enough resources,
individually manage the process of
purchasing and delivering electricity
in the Illinois deregulated retail mar-
ket. Alternatively, school districts
could just pick a retail marketer and
pay the marketers implicit price to
manage the power supply and trans-
mission process. But, how do school
districts know which marketer is
best? You can trust the IEC, which
was created by IASB, IASA and Il-
linois ASBO to simplify wholesale
power purchases and transmission
for delivery of retail electricity and
savings to schools. Illinois school
districts dont even have to go to the
grocery store or be concerned with
milking a cow!
Electric
Update -
Post 2006
Initiative
By Kristi Fitzanko, Electric Program Administrator,
Ameren Energy Marketing, Peoria, IL
For the past four years, the Illinois
electric deregulated market has been
evolving in phases towards full de-
regulation. This process has been
called a Transition. The market
has been operating under rules that
have continued to bene t the util-
ity. Throughout this transition, the
marketplace has experienced changes
in the rules, entry and exit of vari-
ous suppliers, acquisition/mergers
of utility companies, and growth in
customers demanding a fair market.
This has all transpired under the
watchful eye of the Illinois Com-
merce Commission (ICC). The ICC
is currently conducting workshops
aimed at assuring that the market-
place will be ready for full deregula-
tion by the end of 2006.
On the ICCs website,
www.icc.state.il.us, the project is
called Post 2006 Initiative. As stat-
ed on the website:
The Post 2006 Initiative is an oppor-
tunity for stakeholders to participate in
various workshops and identify issues
and concerns as the end of the transition
period nears. The states legislatively
mandated transition period from a fully
regulated electric market to a largely
deregulated electric market concludes
at the end of 2006. This forum should
serve as a starting p