As Naperville considers the future of its electric grid, an array of energy procurement options was presented to a special meeting of the city’s Public Utilities Advisory Board Thursday night.
The presentation marked the next step in Naperville’s exploration of how the city will keep the lights on for residents in 10 years’ time and beyond when the contract with its current electricity provider, the coal-heavy Illinois Municipal Electricity Agency (IMEA), is set to expire.
Between the presentation — given by Philadelphia-based consultant Customized Energy Solutions — public comment and board questions, the meeting lasted nearly four hours.
No recommendations or decisions were made Thursday.
There is another special board session scheduled for April 8. At that meeting, the Naperville Environment and Sustainability Task Force (NEST) will be presenting another viewpoint for the city to consider, one that paints a picture of Naperville’s future electricity supply that is both environmentally and fiscally responsible, NEST leaders say.
Customized Energy Solutions is expected to send a final procurement recommendation in a letter to board ahead of next month’s meeting, according to city staff. Discussion and feedback from Thursday will be factored into the consultant’s recommendation.
Ultimately, information received — from both Customized Energy Solutions and NEST — will help the board make a procurement recommendation to the Naperville City Council.
Naperville has been grappling with the fate of its electric supply for more than a year now. Though Naperville still has a decade left under its contract with IMEA, the agency has given the city until April 30 to decide if it wants to extend its contract out to 2055.
With that in mind, the council in December hired Customized Energy Solutions to lay out alternatives to IMEA and how they measure up to what the agency currently offers the city.
Naperville, unlike most other municipalities in Illinois, provides electricity to taxpayers as a local service, rather than residents relying on an investor-owned utility such as Ameren or ComEd. To do so, the city purchases energy from IMEA, a joint action agency that offers an already assembled power supply to members at a wholesale price.
As it charted possible paths forward, Customized Energy Solutions broadly offered two directions the city council could take: tackling energy procurement on its own or continuing to procure through some kind of joint action agency.
For the former, the consultant gave three options. If Naperville chose to determine its own electric supply, it could buy energy directly from the market, contract out for power generation, or possess and operate its own generation assets — or some combination of all three, said Ann Yu, a vice president with Customized Energy.
Each of the three choices come with their own set of benefits and drawbacks, Yu said. Generally, though, the go-it-your-own approach would give Naperville more autonomy over its electric supply. However, it would also put the city at a greater risk of being on the hook for any fluctuations in the market, Yu said.
It’d be the opposite should Naperville continue on with IMEA or some other joint action agency: less risk but, in turn, less autonomy.
Whatever path Naperville takes, Yu emphasized that “as you transition from fossil fuel resources to renewables, there is going to be a cost increase, regardless of whether you’re doing it with IMEA or you’re doing it yourself.”
That’s because as more entities make the transition towards clean energy, the demand for a greater capacity of renewables will rise, affecting prices, she said.
Ahead of Yu’s report, 11 speakers addressed the board to express concerns with an IMEA contract renewal, inquire about Customized Energy’s findings and encourage decision makers to prioritize the environment in any final verdict. Meanwhile, the board spent more than two hours on questions, asking Yu for more clarity on everything from cost projections to the impact different energy mixes would have on the city’s greenhouse gas emissions.
Discussions Thursday and those due next month aren’t the only conversations for the board to consider as it gears up to advise council.
Customized Energy Solutions’ report comes a week after IMEA gave its own presentation to the board.
At the board’s Feb. 27 meeting, three IMEA staff members provided an overview of where the agency’s services, power supply resources and sustainability goals currently stand — with an undertone of lobbying for a contract extension.
At the core of IMEA’s presentation was the assurance that the agency has a vision to reach a net-zero carbon emissions energy portfolio by 2050 but that doing so will take time, agency staff said.
“I think that as a nonprofit entity, we are trying to transition in an economic and affordable manner,” said Staci Wilson, IMEA’s director of government affairs. “It is truly a time of transition. If we could make this happen today, we would do it today. … There will be fossil fuel, not necessarily just coal, but fossil fuel on the grid for some time to come.”
The bulk of IMEA’s current energy portfolio comes from non-renewable sources. The agency owns a 15% stake in the Prairie State Generation Station, a massive coal-fired power plant in southern Illinois that in 2023 released 12.4 million tons of heat-trapping carbon dioxide into the atmosphere. IMEA also owns a 12% stake in the Trimble County coal plant in Kentucky, according to the agency’s website.
More than a year ago, though, IMEA’s board of directors — composed of representatives from member municipalities — approved a sustainability plan outlining a more renewable-driven path forward for the agency. Ten pages in all, the plan was developed by a working group of IMEA board members, including Naperville.
It includes a roadmap detailing IMEA’s steps to decarbonization over the next two and half decades.
IMEA staff revisited those steps last week. Benchmarks include a battery storage study poised to take place this year, a 45% reduction in CO2 emissions from Prairie State by 2038, Prairie State and a unit at Trimble County shutting down by 2045, and full retirement of Trimble County in 2050.
The plan does not say in detail how the agency will make up for resources lost through decarbonizing but does note that IMEA is committed to exploring “new and innovative technologies” and promises annual reports on the progress of sustainability efforts.
Also important to charting a path forward is knowing who the agency will be serving long term, Wilson said to the board. That’s because most renewable projects IMEA would enter into are long-term ventures and developers need certainty to proceed, she said. That’s the value in lining up contract extensions, agency staff say.
As of last week, 25 members had signed contract extensions, Wilson said.
Over the prospect of Naperville waiting to renew, IMEA Vice President and General Counsel Troy Fodor said, “You do not have a contract option.” He added that, “Of course, you’re a member of IMEA and we’re going to do everything we can to serve you and to give you every option that we can to come along later,” but the risk is that waiting could make service more expensive.
The city’s current contract with IMEA doesn’t have a provision that says, “‘Hey, we don’t have to sign up until 2030.’ It doesn’t say that,” Fodor said. “It never did, and it never will and it was not intended to be that way.”
Another factor agency staff emphasized in their sales pitch was that IMEA projects rates to significantly decrease by roughly 25% in 2035, when bonds issued to help finance Prairie State’s construction in the 2000s are paid off.
After their presentation, agency staff fielded questions and comments from board members concerning costs, the city’s current contractual obligations, ongoing efforts to procure renewable resources and the optics of not just acquiring energy from but being an investor in coal-fired power plants.
“While I know people are frustrated and want us to move faster,” Wilson said, “having some thermal in your resource plan will help you get through some of these volatile years so that … the innovation and some of these new technologies should begin to develop and become more cost-effective. And (then) we’re able to take advantage of them at that time. Most of them are not there yet.”
Asked by board Chair Louis Halkias whether there would “be a change in CO2 emissions to the atmosphere if Naperville does not renew its contract” and if “we make any difference,” Wilson replied no.
“I think the simple answer is that whether Naperville is with IMEA or not, Prairie State will still be running,” she said. “And even if IMEA wasn’t with Prairie State, Prairie State would still be running.”
