A wide range of perspectives and expert analysis were shared during a lengthy meeting on Monday, July 28, as the Naperville City Council held its one and only workshop before a scheduled vote on a potential 20-year contract extension with the Illinois Municipal Electric Agency (IMEA).
City staff scheduled five presenters at the workshop, which ran more than five hours as the council took a deep dive into the issue.
The council is slated to vote at its upcoming Tuesday, Aug. 19, meeting on IMEA’s request for member municipalities to sign on with the nonprofit organization through 2055. Naperville’s current contract with IMEA runs through 2035.
“I want to thank the city council for all the work tonight,” Mayor Scott Wehrli said at the conclusion of the workshop. “I think this is an excellent example of our community working together to try and find answers on a very complicated issue.”
Public Utilities Advisory Board’s majority opinion
Earlier this year, Naperville’s seven-member Public Utilities Advisory Board (PUAB) held a series of its own workshops as it reviewed the IMEA contract. Ultimately, the PUAB in April recommended staying with IMEA, with a narrow 4-3 vote that was passed on to the city council.
PUAB member James Fillar represented the PUAB’s majority opinion at Monday’s workshop.
Fillar said he and other PUAB supporters view IMEA as a durable provider that can withstand some of the energy market volatility and unknowns in the decades ahead.
“The price of power to Naperville has actually declined slightly over the last 10 years,” Fillar said. “It’s evident here that IMEA has provided … affordable, reliable and predictable costs, important to the rate payers of Naperville.”
He also spoke favorably of IMEA’s plans to phase out coal as a power source, with a net-zero target by 2050.
To that end, Fillar added, “The price of solar and wind is not decreasing. In fact, pricing is rapidly escalating.”
Public Utilities Advisory Board’s minority opinion
PUAB member Philip Schrieber gave a presentation to the city council on the panel’s minority opinion on the IMEA contract extension.
Schrieber said he and the other two PUAB dissenters cited several reasons for their negative votes on the contract continuation. Among them: pricing uncertainty and not engaging in a competitive bidding process for a contract of this magnitude.
“Nobody is ever going to agree on what the cost of energy will be, 10 to 30 years from now, for IMEA or for alternate sources, because all of the tentacles that it inputs to,” Schrieber said. “Energy costs are complex, volatile and affected by things that no one can control or accurately predict.”
Naperville Environment and Sustainability Task Force
Members of the local grassroots group Naperville Environmental and Sustainability Task Force (NEST) have been vocal about IMEA and its present-day reliance on coal for its energy portfolio. One leader within the organization also presented at the workshop.
“Unfortunately, IMEA is a minority owner in those coal plants,” Joe Hus, who serves as NEST’s energy chair, said. “It can’t control what goes on in those coal plants, and Naperville is in minority control of IMEA. We can’t control what IMEA does.”
Hus implored the council to consider other options, including the use of power marketers with shorter-term contracts and more flexibility to respond to conditions in the years and decades ahead.
“Naperville won’t control its destiny for 30 years if we sign this (IMEA) deal,” Hus said. “Instead, we would be at the mercy of those other owners of those coal plants and other IMEA members.”
Hus also expressed concern with what he viewed as inadequate information about the transition to renewable energy sources in IMEA’s proposed 20-year contract extension.
The Power Bureau, CJT Energy Law
In addition to the local perspective, the city council at the workshop heard from experts from two different firms.
The Power Bureau LLC and CJT Energy Law LLC presented to the PUAB in past workshops. Representatives from the companies were on hand at the council workshop as well to give their perspective on the decisions Naperville leaders are facing.
Mark Pruitt, a principal with The Power Bureau, gave a view into some of the economic complexities around the energy sector, including the act of hedging to provide options that can withstand some of the disparate uncertainties.
“Financial hedging is insurance. That’s it. It’s a premium. You don’t win too much; you don’t win too little,” Pruitt said of one form of hedging. “A physical hedge is when an entity invests in an asset to make electricity, as opposed to buying electricity. Anyone who puts solar on their rooftop at home — that’s a physical hedge.”
Customized Energy Solutions
Consulting firm Customized Energy Solutions was also part of the recent city council workshop. Ann Yu, vice president of emerging technologies, presented to the council about the issues at play from a global energy perspective.
Yu said there are a number of factors to consider about energy procurement for Naperville’s electrical supply. Her presentation included a look at the broader role PJM Interconnection LLC, the regional transmission organization, plays with the power grid that serves Naperville and beyond.
“Right now, the lower administrative and market exposure, because of the physical hedge that IMEA has … is able to shield itself from the PJM market volatility,” Yu said.
But under the lens of the IMEA contract, Yu acknowledged there are other considerations at play as well.
“The flip side of that is Naperville doesn’t have a lot of say in what your energy mix is,” Yu said. “IMEA does chart a plan in transitioning from where it is today. There is a possibility that this doesn’t happen, so the risk would be the continued use of coal in its energy mix. This is something that is hard to say right now.”
Residents on both sides of the argument continue sounding off
Naperville residents with varied views on the IMEA contract and the city’s approach to long-term energy procurement continued to weigh in on the matter at the workshop meeting. Ten people spoke to the council, and an additional eight written comments were sent in to city officials.
Anushka Sampathkumar, an incoming junior at Metea Valley High School, implored city decision-makers to consider options beyond IMEA and its present-day reliance on coal for the majority of its power supply.
“Naperville has always been a city of leaders and example-setters, so why do we continue to use the old-fashioned methods of coal burning as an energy source, when there are so many modern, sustainable alternatives out there?” Sampathkumar said.
Roger Blomquist, a Naperville resident for nearly four decades, maintained a different perspective as he spoke to the looming decision at the workshop. Blomquist, who has 44 years of experience in energy research and development, defended IMEA’s call for member municipalities to renew with the organization for the two additional decades.
“To begin its 2035 resource plan, IMEA needs to know now — not five years from now — if our power needs are to be included, or if we’re out,” Blomquist said.
Next steps on IMEA, long-term energy procurement discussion
Brian Groth, director of Naperville’s electric utility, briefly spoke to the council’s next steps and the significance of the upcoming Aug. 19 vote at the conclusion of the workshop.
“If the contract is approved, we are covered through 2055,” said Groth, who also serves as vice chairman on the IMEA’s board of directors. “If it’s not approved, staff will pause and will revisit it as we get closer to the contract expiration, with the continued goal of preserving all options available to the city.”
Photo credit: Adobe Stock
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