The long-term financial consequences to Naperville of signing the new IMEA Power Sales Contract[i] are far worse than sticking with the existing contract until a contract decision is actually required in 2030 at the earliest:

• Although Naperville’s existing Power Sales Contract with IMEA expires in 2040[ii], it can be terminated in 2035 with five years’ notice. This means that Naperville has until 2030 to decide whether to replace the existing contract with another IMEA contract or to consider other competitive sources and alternatives.
  
  Signing a new contract with IMEA now forecloses Naperville’s opportunity to decide in 2030 what power sources and suppliers it wants to use for the decades after 2035. By signing now, Naperville will not have the benefit of more timely and relevant information about the city’s needs, more information that will become available during the next 6 years that will enable Naperville to make a more well-informed decision for “beyond 2035.”

• As stated in the PJM Clean Energy Procurement Whitepaper that Naperville received this summer from Customized Energy Solutions, “there is going to be a historically large amount of renewable generation built across PJM in the next 5 years.”[iii]
  
  If Naperville signs a new contract with IMEA now, the city will be foreclosed from the opportunity to buy that clean energy instead.

• Signing a new contract with IMEA now forecloses the city’s opportunity to control what it must financially support for its power supply after 2035 and for another 20 more years until 2055!
  
  Even if IMEA wants to provide Naperville with clean energy, or the right to buy some of the city’s electricity elsewhere, IMEA can’t do that in any meaningful financial way:
  
  
  • IMEA is obligated to take a certain amount of electricity from the Prairie State and Trimble County coal plants that it partly owns, which now is almost 80% of the IMEA power supply[iv]. So IMEA will have to keep paying for and passing on the costs of that coal power to Naperville and the other IMEA Members.
    
    
  • Another 11% of IMEA’s power supply comes from renewable energy resources contracted by IMEA.
    
    
  • IMEA reveals that 100 MW of utility scale solar is planned for 2025-2026[v]. This 100 MW of solar leaves little or no further room in the IMEA power supply for further clean energy resources, until the coal-fired generation is also reduced.  Yet there are no stated plans to reduce that coal-fired generation until 2038 at the earliest, and apparently only if costly and unproven carbon capture technology efforts are not pursued at Prairie State.
    
    IMEA remains publicly silent on future plans at Prairie State, and yet IMEA is asking for a financial commitment until beyond mid-century from Naperville, the citizens, and the ratepayers. It is not in our Naperville best interests to make a commitment with these unknowns and uncertainties.
    
    
  • The new contract’s Member Directed Resources (MDR) option[vi] limits Naperville to replacing 10% of the IMEA power supply with Naperville’s own resources, should Naperville wish to pursue the risks and responsibilities of energy resources development and management and should the IMEA board approve an MDR proposal by Naperville.
    
    But MDR will not reduce the required IMEA offtake and ownership costs of generation from Prairie State and Trimble County, for which IMEA remains contractually obligated as one of the partner owners of these coal plants.
    

• The new contract with IMEA is a cost-plus contract just like the existing contract. So, there is no cost benefit to Naperville for signing a new contract now with IMEA. And signing a new contract with IMEA now will foreclose Naperville’s opportunity to use a fixed-price or capped-price contract with a different supplier after 2035.

• The marginal improvements in a new contract with IMEA should be available to Naperville without Naperville having to sign up with IMEA for a longer term. And if Naperville does not sign a new contract with IMEA now, IMEA may be able to put itself in a position to offer better terms to Naperville in 2035. 

We urge Naperville city leaders to not only compare the new contract with the existing contract, but to, more importantly, also compare Naperville’s limited control over the source and cost of its IMEA power supply for the next 20+ years to the much greater control the city could have after 2035. Then Naperville would be able to:

• Use a supplier other than IMEA that is not required to provide nearly 80% of its power from coal on a cost-plus basis

• Pursue further growth of locally owned solar and battery storage, including customer utilization of Power Purchase Agreements (PPAs) which are currently prohibited in Naperville but allowed in surrounding ComEd territory.

• Consider sourcing Naperville’s own power, should Naperville wish to assume the risks and responsibilities of energy resource development and management

• A combination of all of the above, as well as future options that become available.

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Endnotes:

[ii] Naperville’s Existing Power Sales Contract with IMEA Expires in 2040

[iii] PJM Clean Energy Procurement Whitepaper

[iv] Naperville/IMEA Sources of Electricity

[v] IMEA 2024 Sustainability Plan

[vi] Member Directed Resources (MDR) Provisions of New Power Sales Contract

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This webpage is also available in pdf file format at:
“Financial Reasons to Say NO”
https://drive.google.com/file/d/1NHCmI_hT07mU8WvG9IOp-ssyIrcQB1P7/view