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Board authorizes administration to secure electricity contracts up to five years if rates meet thresholds
Summary
After a presentation on recent procurement work and market conditions, the board approved thresholds allowing administration to lock new electricity supply contracts for up to five years if the energy rate meets or falls below the specified thresholds.
Morton, Ill. The Morton CUSD 709 Board of Education authorized district administrators to secure a new electricity supply contract of up to five years if market rates meet the thresholds presented, following a district presentation on prior procurement and projected savings.
Why it matters: Electricity is a material operating cost for the district. Administration reported that moving away from the Illinois Energy Consortium in 2022 and using a broker-led reverse-auction approach reduced costs versus the IEC rate, and that securing a new contract now could save taxpayers further money depending on market conditions.
Adam Jacob, business-office staff, reviewed recent history: the district paid about 4 cents per kilowatt-hour before 2022, then received an IEC quote at just under 11 cents per kilowatt-hour when the market spiked; the district later secured roughly 8 cents per kilowatt-hour via a broker-led process and a MidAmerican supplier (later absorbed by Constellation), which Jacob said saved the district roughly $250,000 across fiscal years 2023''25. Jacob explained three pricing components (energy, capacity and transmission) and recommended passing capacity and transmission through rather than fixing them, because fixed contracts include premiums and supplier protections.
Administration recommended authority for the superintendent and business office to sign a contract if rates fell at or below thresholds presented to the board. The board voted to approve the motion allowing administration to secure contracts up to five years when rates met the threshold terms.
Vote: During roll call on the motion to approve the electricity acceptable thresholds and allow administration to sign contracts if energy rates fell at or below the thresholds, the board recorded the following votes: Mister Redd '' yes; Mister Breaker '' yes; Doctor Cross '' yes; Missus Layman '' yes; Mister Neely '' yes; Mister Roth '' yes. The motion carried.
Supporting details: Jacob said suppliers vary in how they price and that some suppliers will not offer pass-through terms; he noted that some low bids are driven by suppliers willing to trade on volume. Administration estimated potential savings of about $50,000 per year compared to the current contract if favorable terms are secured. The presentation recommended pursuing direct supplier contacts instead of paying an external broker fee estimated at roughly $13,000 per year (three-tenths of a cent per kilowatt-hour) because the district believes it can obtain competitive pricing directly.
Next steps: The board granted the requested authority and administration will return the executed contract or report the final terms after securing a deal that meets the approved thresholds.
Context: The district''s current supplier is now Constellation (which bought MidAmerican), and the district''s contract expires in May 2025. Administration framed the action as time-sensitive because quoted energy rates change daily and favorable market windows can be brief.
