Ald. Bob Bauman
Press Release

Council measure seeks changes to allow energy competition and savings

Alderman Robert J. Bauman has introduced a resolution that seeks to change state law to allow the city and small businesses to seek alternative energy provider.

By - May 1st, 2014 02:12 pm

Alderman Robert J. Bauman has introduced a resolution that seeks to change state law to allow the city and small businesses to seek alternative energy providers – all in an effort to reduce energy costs, help meet sustainability benchmarks and reduce the city’s reliance on WE Energies.

Common Council file #131809 (attached), directs the Department of Administration’s Intergovernmental Relations Division to lobby members of the Legislature to amend and create state statutes and regulations relating to energy procurement by municipalities. According to the file, the desired changes seek to:

  • Expand retail choice for utility customers and expand competition within the energy industry by offering customers the opportunity to purchase energy from their current utility or an alternative supplier.
  • Allow the City of Milwaukee to utilize its buying power to negotiate lower utility rates for residential and eligible small business ratepayers.
  • Use reverse auctions for the procurement of energy.

A “reverse auction” is a type of auction in which sellers bid for the prices at which they are willing to sell goods and services. In a regular auction, a seller puts up an item and buyers place bids until the close of the auction, at which time the item goes to the highest bidder. In a reverse auction, the buyer puts up a request for a required good or service. Sellers then place bids for the amount they are willing to be paid for the good or service, and at the end of the auction the seller with the lowest amount wins.

Today, corporations and large units of government are increasingly using reverse auctions to purchase raw materials, supplies and services.

City records show that in 2013, the city, including the Water Works and Sewer Maintenance Fund, paid $16.7 million to WE Energies for electricity, including electricity for street lights, natural gas and steam for municipal buildings. In addition, the rate the city pays to provide electricity for smaller city facilities, including fire stations and many public works field offices, has increased 87% since 2003.

On April 2, the Common Council approved a measure directing the Department of Administration-Office of Environmental Sustainability and the Department of Public Works to create an energy independence plan that will, among other things, reduce reliance on WE Energies for the supply of electricity, natural gas and heat to operate city facilities. Last year the Council adopted the city’s first sustainability plan, ReFresh Milwaukee: City of Milwaukee Sustainability Plan 2013-2023, which calls on the city to reduce energy use 20% by 2020 and increase reliance on renewable energy to 25% by 2025.

File #131809 is expected to be heard by the Council’s Judiciary and Legislation Committee on Monday, May 5 at 1:30 p.m. in room 301-B at City Hall, 200 E. Wells St.

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