Decatur 61 authorizes administration to run live reverse auction for electricity; natural gas pricing to be refreshed

Decatur Public School District 61’s Board of Education on Aug. 5 authorized district administration to conduct a live reverse auction for electricity supply and to pursue updated pricing for natural gas, with the administration given authority to sign contracts if preset thresholds are met.

The action was approved as part of the consent agenda and carried on a 6-0 voice roll call with one member absent. The consent item specifically granted administration approval to accept electric rates and run the auction if thresholds were satisfied.

District consultant Becky, who presented market analysis during the board discussion, told the board the district’s current electricity contract — a roughly five-year agreement with Constellation — was locked at about 4.7 cents per kilowatt-hour, “about a third of what today’s market is.” Becky said the district’s annual electricity use is “just shy of 19,000,000 kilowatt hours,” and that planned solar installations, if completed at all recommended sites, would reduce usage by about 50% within two years.

Becky described the procurement plan: the district will run a live reverse auction for the supply portion of electricity while leaving capacity and transmission costs as pass-throughs. The consent item asked the board to approve thresholds that let administration proceed with a live auction on short notice; the approved threshold equals the qualifying low bid plus a 10% adder to allow for market movement between the indicative pricing and the live auction. Becky said the auction is not obligatory — administrators may decline to sign if terms are not acceptable — but if the district accepts an auction price it must sign that day.

On budget impact, Becky advised the board to plan for “at minimum, probably a 100% increase in your energy cost” compared with the district’s prior locked rate, noting that the district’s solar power purchase agreement rate is 2 cents per kilowatt-hour versus roughly 10 cents all-in in current indicative pricing. She urged district leaders to move quickly on solar installation to reduce exposure to higher market prices.

For natural gas, Becky recommended the district adopt the same product type used previously — a “100% swing” fixed-rate product that allows monthly usage to vary up to 100% above or below forecast while keeping the fixed price. She said the district’s past floating/month-to-month natural gas arrangement left it exposed going into winter and noted the previous contracted index was “just shy of 44 cents a firm.” Because fewer suppliers offer the 100% swing product, Becky said the administration would refresh pricing rather than run an auction for gas; those refreshed offers would be presented at the September board meeting.

Board members did not request substantive changes to the plan during the presentation. Administration said, if the auction thresholds are met when the live auction is run, administrators are authorized to sign agreements for electricity and to proceed with the natural gas RFP; if thresholds are not met, the district will not obligate itself.

The consultant said the auction would be conducted the Thursday after the board meeting if thresholds were approved and suppliers qualified; natural gas refresh pricing would be issued the same week with a decision later.

The board approved the entire consent agenda — including the energy authorization — on a 6-0 vote with one absent during the meeting’s consent vote.