Note: This posting is a copy/paste from email to NEST Energy Committee sharing the IMEA Board Meeting. (Formatting characteristics of the email changed when copy/pasting from Microsoft Outlook using the WordPress editor.)
Hello Energy,
Sharing my selection of “highlights” from Thursday’s Feb 15 IMEA Board Meeting:
- Approval of the forms of the new contracts
- IMEA’s verbal presentation on the muni-coop transparency legislation
- IMEA goals for fiscal year 2025
- Presentation and approval of both the revised FY 2024 budget and the new FY 2025 budget
- Nominations and approval of the Executive Board for FY 2025
Followed by:
- Text of comments on the new contract by our Naperville Electric Director at the previous day’s IMEA Executive Board Meeting (He was unable to attend the Thur board meeting due to his required attendance at a union arbitration hearing that could not be rescheduled), and
- an appendix with my notes on additional board meeting slides
The link to the meeting’s presentation slides pdf is:
https://drive.google.com/file/d/1jJCaW2N39vjC-_jQ0nebKSlefEwowKRe/view
Slides, agendas, minutes, etc. from this meeting and previous board meeting are posted in the CLEAN google drive.
https://drive.google.com/drive/folders/1jWacdmtQ4yPRzkbUAjKWz4RVuwDzUEDM
Thursday’s meeting slides and agenda files begin with the file prefix 2024-02-15_
The above link to the CLEAN IMEA Board Meetings google drive is also posted in the CLEAN Sources and Resource page:
https://cleanenergynaperville.org/sources-and-resources/
IMEA provides us no recordings of the meetings, unlike our Naperville city council and many other public bodies. The minutes will become available once approved at the next IMEA board meeting scheduled for April 27. If there’s interest, I would be willing to host a Q&A zoom to review and discuss this Feb 15 meeting.
1. Approval of the forms of the new contracts (slides 41 – 44)
- Forms of the new contracts were unanimously approved by the 22 Member representatives in attendance.
- A package will be sent out by end of month to all the Members with a cover letter, new contract forms, and draft language for Members to consider using in their municipal resolutions/ordinances approving the contracts. [We learned at December’s board meeting that the time period to consider renewal is up to 14 months, Mar 1, 2024 to Apr 30, 2025]
- As I described earlier, our Naperville Electric gave comments at the previous day’s Executive Board meeting. Thetext of his comments are below, following item 5 in this email.
- Slide 41 lists several changes to the new power sales contract form, since the December board meeting.
One change is a clarification that IMEA-sponsored projects in Member municipalities do not count against the Member Directed Resources (MDR) limit. Such IMEA-sponsored projects include the IMEA 1 MW solar project in Naperville at Springbrook and possible future IMEA-sponsored battery storage projects within a Member’s municipality
- Slide 42 lists several changes to the Capacity Purchase Agreement. These agreements apply only to those Members who dedicate their local generation resources to IMEA. Winnetka’s natural gas generation is an example.
The 2015 IMEA bond prospectus contains this description on pdf file page 37, footer page number 25:
IMEA’s Participating Members with existing fossil fuel-fired generating units have dedicated such facilities to IMEA under Capacity Purchase Agreements (“Dedicated Capacity”). Approximately 295 MW net tested capability of Dedicated Capacity is available to IMEA upon request to meet its load requirements. Due to the age and relatively higher costs of fuel utilized, these facilities are generally best suited for use as peaking and reserve capacity. Table 5 below summarizes the existing dedicated generating resources of the Participating Members.
https://drive.google.com/drive/folders/1m48LekH86aZ6DR9NiwEajOl5pIqjt__z
2. IMEA’s verbal presentation on the muni-coop transparency legislation (slide 16, from the legislative & regulatory report section of the meeting)
- Slide 16 lists “Transparency Legislation” as a bullet point. Further details were provided verbally by the IMEA Legislative Director.
Sharing items from my notes on what was said by the Legislative Director [and offering my comments after]:
HB5021 and corresponding language in SB3637 has a dramatic impact on munis, agencies, and coops
- “chock-full” of new requirements
- imposes an Integrated Resource Planning (IRP) requirement
- imposes a renewable portfolio standard (RPS)
- puts in state oversight and cedes local control for the first time in history
- your power supply and policies have always been city council regulated
- IMEA already has a higher renewable percentage than the state
- IMEA already has a sustainability plan commitment
- we don’t think resource decisions should be made by the state
- whole host of transparency requirements
- already on IMEA website or in IMEA board meetings
- budgets, resources, capital expenditures, others
- prime example is budget in today’s meeting
- munis are the most transparent in the state
- with OMA, FOIA, and our board meetings, don’t think that can be disputed
- net metering was already negotiated in CEJA
- some eminent domain provisions may cause muni problems with the way they are written
[
COMMENTS:
First, please I encourage you to become well-versed on the transparency issues. Meeting the letter of the law with respect to the Open Meetings Act (OMA) and Freedom of Information Act (FOIA) are ground level requirements, but alone are not sufficient to provide transparency in many key areas. Descriptions, explanations, and examples are provided in our CLEAN “Lack of Transparency” webpage and detailed document:
https://cleanenergynaperville.org/did-you-know/lack-of-transparency/
Second, from my perspective regarding transparency on matters in our local Naperville electric utility, Naperville does a pretty good job on that transparency. I also appreciate our Electric Director’s time, efforts and genuine interest in dialogue and providing transparency. But when we cross over into power supply and IMEA matters, transparency apparently depends on what IMEA will provide.
Let’s take a look at that “prime example” noted above from the words of IMEA: the IMEA budget.
- IMEA budget presentations and the votes to approve the budget occur in the very same IMEA board meeting, even though this is a $350 million annual budget with a corresponding balance sheet of $1.2 billion in assets. Compare that with the City of Naperville budget process, which is publicly posted and reviewed by city council in workshop meetings over a period of months. Not suggesting that there shouldn’t be meaningful differences between the two, but that same day IMEA presentation and vote is quite striking.
- In advance of the board meeting, the IMEA board members receive a copy of the proposed budget and budget resolution documents. Apparently no one else sees a copy. Those budget resolution documents, as well as all other IMEA resolution documents, are not posted online and not available to the public in advance of the board meetings.
- The citizens and ratepayers who are financially responsible for paying those IMEA monthly bills have no advance opportunity to review, question, and offer stakeholder input. Compare that with Naperville budget workshops and city council meetings where resolutions, ordinances, and supporting materials for agenda items are posted online in advance of the meetings. They are available for public review, questions, comments, and even time to contact council members and city staff.
- Contrary to the IMEA claim, this “prime example” would appear to suggest that this budget of IMEA is quite a bit low on the scale that measures transparency.
]
3. IMEA goals for fiscal year 2025 (Slide 14, part of President and CEO’s report)
- Note that IMEA FY2025, also referred to as FY24/25, runs from May 1, 2024 to April 30, 2025
- Here are the goals copy/pasted from slide 14. [Note the contract renewal goal of at least 20 members.]
- Complete FY 24/25 below approved budget
- Maintain Debt Service Coverage of 1.20 at fiscal year end
- Visit each Member at least once in fiscal year
- City Council meetings/workshops to provide IMEA/IMUA background
- Maintain all current financial ratings agency status
- Complete Ameren WCA/UCA agreements and host Member workshops for those affected by the outcomes
- Execute at least 20 new IMEA Power Sales Contract and have them approved by IMEA Board by April 30, 2025
- Complete installation of 3 current BTM solar projects by April 30, 2025
- Negotiate contract(s) for 100MW of utility grade solar and have IMEA Board approve by April 2025 Board meeting
- Extend IMEA Demand Response Program for FY 24/25 and sign up at least 4 retail customers
- Evaluate Ameren WDS rate change proposal and determine IMEA’s efforts to mitigate increases
- Evaluate and provide recommendations to Board for next 3-year Energy Efficiency & EV Programs
- Complete study of installing utility scale, BTM battery storage unit within a member system to be completed by December 31, 2025
- Determine options and most cost-effective method(s) for a Conservation Voltage Reduction Program by December 31, 2025
4. Presentation and approval of both the FY 2025 budget and the revised FY 2024 budget (Slides 45 -59)
- Copies of the two budget resolutions have been requested from IMEA. I expect to receive them next week after they are formally signed.
When received, the resolutions will be uploaded into the publicly shared CLEAN IMEA Board Resolutions directory:
https://drive.google.com/drive/folders/1Z3rPQTGKKmqN9IzjFaFormy0UUQuhJPd
- Slide 45 provides a graph of IMEA Rates 2015 to 2024 titled “IMEA Actual Rates Consistently Under Budget”
- Resolution/ordinance 24-02-897 and slides 46-52 contain the revised budget for the current fiscal year 2024 which ends Apr 30, 2024
My notes:
Operating expenses lower than original estimates
Purchased power costs are lower
- IMEA is selling power in PJM [Prairie State and Trimble County are located in MISO and both are pseudo-tied to PJM]
Prairie State and Trimble County fuel costs increased
Trimble County O&M increased while Prairie State decreased
Transmission costs are lower than original estimates
- Ameren charges lower due to lower peaks [network service charges are based on peak]
IMEA’s A&G expenses are lower
- Compared to peers, lowest of any Joint Action Agency
No board member questions or discussion prior to approval
- Resolution/ordinance 24-02-897 and slides 52-59 contain the budget for fiscal year 2025 that begins May 1, 2024
My notes:
Planned Prairie State Outages
- PS1-10 day fall outage
- PS2-28 day fall outage
Planned Trimble County Outages
- TC1-9-day fall outage and 16-day spring outage
- TC2-65-day fall outage (turbine) and 16-day spring outage
Capital budget higher than FY24 Revised Budget
– TC capital requirements for stack projects engineering and prep [Earlier TC report during the meeting reported stacks for both units]
Purchase power costs to increase
- Due to lower generation from planned outages + less favorable market than FY2024 [less market sales to offset purchases]
Lowr fuel costs due to planned outages at Prairie State and Trimble
Transmission costs increase [Ameren and ComEd network service charges]
Budgeting for three new staff members: PSC Supervisor, Project Manager (if needed) and Government Relations staff person
No board member questions or discussion prior to approval [My memory of the day before Exec Board meeting tells me that there was one question about the Project Manager position. It’s budgeted, but will not be filled without coming back to the board for approval]
5. Nominations and approval of the Executive Board for FY 2025 (Slide 62)
- Our Naperville Electric Director, Brian Groth, was nominated and approved by the Members to serve as Vice-Chair of the full IMEA Board for FY2025 which starts on May 1, 2024.
- Copy/paste from slide 62 of the nominations and approvals. All nominations were unanimously approved.
- Cory Sheehy, Marshall as Chairman
- Brian Groth, Naperville as Vice Chairman
- Dan Cook as Secretary/Treasurer
- Troy Fodor as Assistant Secretary/Treasurer
- David Coston, Carmi
- Pat McCarthy, Chatham
- Sue McLaughlin, Farmer City
- John Tolan, Freeburg
- Pete Suhr, St. Charles
- Mike Kirk, Sullivan
Text of Naperville Electric Director’s Comments at the Feb 14 IMEA Executive Board Meeting. (The text was emailed to me along with permission to share.)
Let me first start by noting that I will not be at the full board meeting tomorrow as we have a union arbitration hearing in Naperville for which I need to be in attendance. This hearing was scheduled over six months ago and could not be rescheduled.
From time-to-time local commitments cause conflicts and I wanted to be transparent on the reason for my absence tomorrow. Thank you for the understanding.
With respect to the resolution authorizing the president and CEO to seek contract extensions from current IMEA members, I believe the following comments are a fair and accurate summary of both the agency’s work on this topic as well as Naperville’s efforts to date.
By voting for the approval of the standard form of the contract and authorizing the president and CEO to seek contract renewals this board is not binding any member’s community to a contract extension, this is simply starting the conversation of who will remain in the agency at 2035 so that the agency can begin planning how it will support those members beyond this date.
While the contract may be one document that governs the interaction between the municipalities and the agency, I would not like to lose sight of the sustainability plan, which is a living breathing document which was approved by the board and outlines the agency’s sustainability goals as well as the process by which agency staff will regularly update the board, and member municipalities, on these goals. We also should remember our work here as the Board of Directors. All of this comes together to provide affordable, sustainable and reliable power to all of our customers.
From a local perspective, Naperville continues to review the proposed contract documents with internal and external legal counsel as well researching all options available to the City through its work with consultants. To that point, we have and will continue to seek stakeholder input on contract terms and language, proposing additions and/or changes as warranted.
I appreciate all of the work agency staff have put into this contract proposal, listening to members of the contract working group to incorporate key changes to the document, I was a part of this working group and experienced first hand the level of effort that went into this document. Through my participation in the working group, I understand the agency and boards desire for a single contract form between all members and also understand that each community may seek to have a different energy mix today and in the future. I am confident that at the end of the day our collective work will give all members the flexibility to utilize local control over their energy mix while ensuring that all members are protected from the cost shift that could occur with increased utilization of the Member Directed Resources concept.
Our work on this contract extension continues with the common goal of providing reliable energy delivery to our communities now and in the future.
Appendix of My Further Meeting Notes
- Behind the Meter (BTM) and Utility Scale Solar (Slides 26 – 29)
Looks like Altofer is likely to be selected for the contract to develop BTM projects in Marshall, Oglesby, and Princeton
SolAmerica works continues for USDA PACE loans for projects in Rantoul, Highland, Carmi, and Metropolis
IMEA reports that they are in steady contact with 4-5 utility scale solar projects
Projects continue to experience delays: mineral rights/land title, interconnection, supply chain
Developers want to push risks back on IMEA
IMEA is also in competition with large corporations such as Amazon with their own clean energy goals
Costs are nearly double what they were back in 2019
- Operations – MISO (Slide 19)
Warnings on future capacity deficits in MISO
Gap of 9 GW in MISO planning year 28-29
- Operations (Slide 20)
Three IMEA Members hit all time peaks in January
- Trimble County (Slide 21)
Sounds like large expenditures are coming to rebuild stacks for both units TC1 and TC2
- Prairie State (Slide 22)
No reported change in carbon capture project status
- How Do PJM Capacity Market Changes Impact IMEA (Slides 33-34 of the legal report)
FERC approved filing ER24-99 for PJM to again change the way it determines capacity for the capacity markets
IMEA is “well hedged” with ownership of thermal resources (coal-fired units) for the expected impacts of reduced capacity credit and increasing capacity prices
- Resolution 24-02-899 Revised Schedule A for Naperville (Slide 40)
The board approved changes to Naperville’s IMEA Schedule A
Resulting from the shutdown on Dec 31 of two co-generation units at the former Amoco site.
Schedule A identifies the measurement points of energy “delivered by IMEA”.
[My understanding is that these are the IMEA/PJM metered locations where the high voltage PJM/ComEd transmission network meets the Naperville local distribution network.]
- Financial Projections and IMEA Member Rates (Slides 60-61)
The main message is: our IMEA costs and your Member rates remain stable, except for increasing transmission costs from ComEd and Ameren
—–
As usual at the end my board meeting emails, here’s my encouragement to you to also attend IMEA board meetings. Webinar means not having to devote a whole day commuting to and from Springfield. Ted, from Energy Committee, attended for the first time, and Maureen was again able to squeeze in part of the meeting with her work schedule.
The webinar registration info is posted within the meeting agendas, typically posted at the end of the preceding week.
https://www.imea.org/IMEA%20Board%20Meeting%20Schedule.asp
Next scheduled meeting is the IMEA Executive Board meeting on Mar 27, 2024 at 10:00AM
Next scheduled full IMEA Board Meeting is April 25, 2024 at 10:00AM, preceded by an Exec Board Meeting at 2:00PM the day before April 24, 2024.
Thank you.
Greg