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IMEA Board Meeting Apr 24, 2025 Limited Report and Commentary

Posted on Modified on by Greg Hubert

Note: This posting is a copy/paste of an email report to the NEST Energy Committee, where the formatting characteristics of the original email change when copy/pasting from Microsoft Office using the WordPress editor.

Energy,

Sharing this limited report and commentary email on the Thursday Apr 24 IMEA Board Meeting. This email is focused on the IMEA President and CEO’s two slide titled “IMEA New Power Sales Contract Open Season is Now Complete – Next Steps” and the one hour Q&A discussion that followed his presentation.

A copy/paste of the text of those two slides 13-14 can be found at the end of this email.

The link to a copy of this IMEA board meeting’s presentation slides pdf is:
https://drive.google.com/file/d/1Jrilh1cE5dk77K88yLN0tOv8ZmqdVqfb/view

The link to IMEA’s board meetings webpage, which now contains links to the IMEA board meeting packets, is:
https://imea.org/IMEA%20Board%20Meeting%20Schedule.asp
Note that IMEA is also now keeping older meeting records posted on their website, including board meeting packets but not including board meeting slides.

Links to our CLEAN historical collection of IMEA board meeting slides, agendas, minutes, resolutions, monthly financial reports, etc. is posted on the CLEAN Sources and Resource webpage:
https://cleanenergynaperville.org/sources-and-resources/imea-board-and-other-imea-records/

The IMEA President and CEO gave roughly an 8 minute presentation on the new contract history and timeline, followed by his recommendation to the IMEA board that the board not close the new contract offer until the August IMEA board meeting.  His two-slide presentation was followed by an hour of Q&A and discussion.

  • At the end of the discussion, the IMEA board tabled a motion to extend the “open season” of the new contract offer. And instead, at the next IMEA board meeting in June, the IMEA agenda will document a proposed resolution to extend the open season until the August and then the IMEA board will formally vote whether to approve the extension.
  • There are 5 IMEA members who have not approved the new contract: Naperville, St Charles, Winnetka, Cairo, and Fairfield. The other 27 IMEA members have all approved the new contract.
  • In my opinion, much of the discussion could be categorized as both concerns regarding cost impacts and opposition.  The  IMEA CEO repeated quite a few times that he understood the concerns and opposition, and he repeated the recommendation to  give these 5 members this extension as they are working in earnest to finalize their decisions.
  • At the end of the open season, IMEA will send a formal letter rescinding the offer.  A draft of the letter was requested to be provided for the June board meeting. There was discussion of penalties that might be described in the letter. Also the letter would describe that if there were any further negotiations, the terms and conditions would have to be acceptable to the majority and would be subject to the adverse distinction clause. That adverse distinction clause was described as giving the members who have already signed the same terms and conditions if they want it.
  • There was also lengthy discussion whether it was appropriate to hold the vote to extend the open season at this board meeting versus the June meeting when there would be formal notice of the resolution to be voted.

Below you will find extracts from my notes of those Q&A discussions with board members. Quite sarcastically, I’ll add my request for you to contact “open and transparent” IMEA for a copy of the board meeting recording, which IMEA does not provide to the public while many if not most other units of government do provide.

But before my notes, I have some comments related to the IMEA President and CEO’s history and timeline narrative while he was presenting the first slide. From my perspective, here we have further examples that suggest that IMEA is not telling the more complete story.

  • The President and CEO described the start of the new contract effort to be shortly after Covid.
    • But in the year prior to Covid,  at the August 29, 2019 IMEA board meeting which I personally attended in Springfield, IMEA described the reason for a need to begin discussion with members of extending contracts. This is the “runway” issue that the slide describes the board discussing in late 2022.  In my Aug 29, 2019 email to another public member who attended the meeting, I described what I remembered IMEA telling the members:

      “Near term we may need to begin discussion of IMEA members’ power sales contract extensions. We won’t be able to give renewable owner/operators the 20 year commitment that they will need to secure 20 years financing.”
    • The minutes of the previous June 20, 2019 board meeting also document, in the first complete paragraph on page 2:

      “Staff is developing a Fall 2019 IMEA Board Strategic Review session to discuss State and Federal legislative issues, the status of the energy and capacity markets and the logistics of the renewal of long-term sales contracts for IMEA members which will be held in closed session.”
      https://drive.google.com/file/d/10ENU5CLynJLZXNP5aExW0MYAuDCUagZu/view
    • Those Nov 6-7, 2019 IMEA closed session meeting minutes still remain withheld from the public today, over 5 years later, by repeated approval of the IMEA board.
    • At the Naperville City Council meeting of Nov 19, 2019, in response to NEST’s email and public comments regarding early contract renewal, Naperville suggested that there were no new contract efforts underway.

      “… How the city proceeds with purchase power contract post 2035 will require extensive, deliberation, analysis and evaluation by council and the community. This multi-year deliberation work will begin well in advance of 2035, but we have not started it yet. Our city believes in complete transparency, and we will continue to work that way. The future consideration of public power contracts beyond 2035 will be a very public process. …”
      https://youtu.be/HaYktgi0JIk
  • The IMEA President and CEO said that in 2020 and 2021 IMEA “worked very hard” to get out of the Vistra coal-fired power plant contract “to begin a more robust transition” to renewables
    • Any discussions of IMEA efforts to get out of the Vistra contract earlier in 2020 and 2021 would have occurred in closed sessions without the public’s ability to confirm that claim. Also consider the IMEA claims of working hard to get out of the contract to transition to renewables in the context of a corresponding lack of IMEA public planning along with Vistra’s public announcements to retire its plants in Illinois

      Vistra Accelerates Pivot to Invest in Clean Energy and Combat Climate Change
      https://www.prnewswire.com/news-releases/vistra-accelerates-pivot-to-invest-in-clean-energy-and-combat-climate-change-301139377.html
      IRVING, Texas, Sept. 29, 2020 /PRNewswire/ — Vistra (NYSE: VST) today announced a comprehensive plan to accelerate its transition to clean power generation sources and advance efforts to significantly reduce its carbon footprint. The company launched Vistra Zero, a portfolio of zero-carbon power generation facilities, including seven new developments announced today in its primary market of ERCOT that total nearly 1,000 megawatts. In addition, the company committed to more ambitious long-term emissions reduction targets, released its first climate report, and announced its intention to retire all of its generation subsidiaries’ coal plants in Illinois and Ohio.
  • The CEO thanked those members who have taken action in support of the new contract and to continue to “aggressively transition” to more renewables.
    • In my opinion, it’s interesting to note IMEA using the word “aggressively” in the context of renewables, as the Naperville CES presentation slides to PUAB had used the word “aggressive” in their description of IMEA renewable energy integration plans. Yet the CES presenters apparently chose not to respond to my ask in public comments to please explain so that we might understand what we do not see.
      https://youtu.be/UEC5vAjcLEI?si=QhmgLJpxTwHXRFYw&t=794

Now some notes from the Q&A discussion. The webinar does not show who is speaking, but I believe I heard close to a dozen board members speak up. The responses came from the IMEA President and CEO.

  • Are these five really working or are they “just blowing smoke up our ass”?
    Response included: That’s legit question. We think they’re close enough to give them a little more time. At the same time, it’s your decision.
  • Would the five care to share with us why they have not voted?
    The reps from Cairo, Naperville, St Charles, and Winnetka each described steps and activities that have occurred in their municipalities.
    IMEA CEO added that Naperville’s consultant recommended IMEA with the Member Directed Resources option.
  • Have we lined up enough power to 2050 with or without these members?
    Response included: We have enough for the 27, not enough for the 32 with a solar resource coming off in 2030, a wind resource coming off in 2035, and reduction in Prairie State 2035-2038
  • August extension give you enough leeway?
    Response included: We’re talking 4 months. After that, it will require mutually agreeable terms including premiums
  • Hard pressed to know what mutually agreeable looks like?
    Response included: We have the precedent of same portfolio, terms and conditions, and premium
  • Is there a plan for the 27?
    Response included: Absolutely. Procure less when those resources come off.  Reliable resources beyond 2035 are paid for. No debt anymore
  • We had a member 30 years ago who tried to stay out and we’re still paying for it. The unsigned are not worried about the money. It’s something else.
    Response included: There will be no special deal that’s better than what you have today
  • I’ll have to answer to my board with a good reason if I have to go back to them about offering an extension.
    Response included: Exact same terms and conditions. At least 17 of this board have to approve. It’s your decision. And there’s a no adverse distinction clause in the contract if they come back and you want the same terms and conditions.
  • Bad taste in my mouth. I won’t support more than 90 days. Not in favor of any type of negotiations.
  • There should be hard terms … so it has escalating meaning.
  • No way to 4 month extension, and no change to contract
  • CEO provide a wrap up which I assume was prepared and it included:
    • This organization has the highest credit rating of any power supply utility in Illinois and very high among all in the country
    • 20% renewable higher than the state of Illinois
    • 20% cheaper rates at a retail basis
    • If you don’t decide, we wish you well
    • If you do decide, you get to share the gain and the pain
    • We’re proud of what we do and have accomplished. IMEA has superior products.

Here’s the copy/paste of the text of the two slides:

Slide 13: IMEA New Power Sales Contract Open Season is Now Complete – Next Steps

  • Overview of Timeline of How and Why we sought IMEA Contracts from 2035 to 2055
    • IMEA Members discussed the need to extend contracts to allow IMEA to procure desired solar project at attractive terms and pricing to replace Vistra contract throughout calendar 2022 – Vistra contract ended May 2022→to begin our transition to more renewable fleet
    • IMEA Board met to review solar contract options and logistics at the time to secure renewable energy resources in late 2022 – discussed contract “runway issue” that would not allow IMEA to contract for solar project for total of 8-10 years vs typical 20-25 year agreements→Board/Staff decided that it’s most cost effective to extend contracts now
    • IMEA Board sought a member contract working group to develop new Power Sales Agreement and Capacity Purchase Agreement to allow for enough time to contract for new renewable resources during Calendar 2023 – 7 IMEA Board members reviewed each section of contracts and other agency documents→included 2 of the remaining 5 non-signers
    • IMEA Board member working group completed draft of contract for IMEA Board review in December 2023 in Board meeting
    • IMEA Board sought to have IMEA staff provide a legal and business review of the new contract terms with member staff, legal counsels and elected officials in January 2024 – very well attended by members – most unsigned members attended that webinar
    • IMEA staff recommended the IMEA Board approve the form of the new Power Sales Contract and the Capacity Purchase Agreement at the February 2024 to begin members approval process, for Member approval beginning March 1, 2024 and having an open season for members to approve contracts by April 30, 2025 – Unanimously approved by IMEA Board
    • As of today, April 24, 2025, assuming that all pending agreements are approved today, IMEA will have a total of 27 of the agreements approved both locally and by the IMEA Board
      • Thanks to all IMEA members for your decisive action and support of the IMEA contract opportunity
      • IMEA will continue to provide our members with reliable, affordable and sustainable power until at least 2055

Slide 14: IMEA New Power Sales Contract Open Season is Now Complete – Next Steps

  • Overview of Timeline
    • IMEA Contract “Open Season” is set to end on April 30, 2025
    • At this point, there are 5 IMEA members that have not yet taken action to approve the IMEA offer
  • IMEA Staff recommendation for Board’s consideration
    • Staff recommends that the IMEA does not close the opportunity for members to approve IMEA’s contract offer
      • Many of the remaining members that have not yet approved the agreements are still working in earnest to finalize the decision in the coming months
      • IMEA staff recommends that the IMEA Board allow them to complete their current deliberations and approve the IMEA agreement(s) – Power Supply Agreement and Capacity Purchase Agreement (for those with local member generation currently under IMEA contract) over the coming few months
        • So long as the local governing bodies continues to make steady progress towards a decision over the coming 60-90 days, IMEA staff recommends allowing them the time to complete their deliberations and take necessary action at local governing bodies for IMEA Board approval within the next 2 IMEA regularly schedules June and August Board meetings
      • If the remaining members have not approved IMEA supply contracts that are mutually agreeable to Member and IMEA before the August 2025 Board meeting, then the IMEA Board would then take action to rescind the open season during the August 2025 Board meeting
      • In summary, although all IMEA members have been aware and engaged with the process since nearly 3 years ago, the IMEA staff feels that providing the remaining governing bodies a short extension to this open season is appropriate
      • Questions or concerns from the IMEA Board?

—–

Again this is a limited report and commentary on the board meeting.  I have no plans to provide a further report. Further meeting information is available in the board meeting slides at:
https://drive.google.com/file/d/1Jrilh1cE5dk77K88yLN0tOv8ZmqdVqfb/view

The IMEA board meetings webpage tells us the next scheduled exec board and regular full board meetings are scheduled for June 25-26
https://imea.org/IMEA%20Board%20Meeting%20Schedule.asp

Thank you.

Greg

IMEA Board Meeting Oct 24, 2024 “Commentary”

Posted on Modified on by Greg Hubert

Note: Apparently IMEA will not provide us a copy of the video for everyone to watch, so I am now publishing this citizen commentary on IMEA’s Resource Planning presentation. It represents a copy/paste and edited consolidation of two emails to the NEST Energy Committee, where the formatting characteristics of the original emails change when copy/pasting from Microsoft Outlook using the WordPress editor.

Instead of a “highlights” report, my two emails to the NEST Energy Committee were my commentary on the IMEA board meeting’s Resource Planning presentation by the IMEA President and CEO.
We had received a copy of the slides in advance of the board meeting with the ask that we watch IMEA’s board meeting presentation to give the slides “proper context” before we offered comments.
I had waited to post with the expectation that IMEA would provide full transparency with a recording, so that all who could not attend the board meeting including our city council would have the same “proper context” opportunity to also use to evaluate my commentary as well as any by NEST too.
Please be aware that IMEA is not legally required to provide recordings of board meetings. And now IMEA is telling me in writing that no such record exists, even though the board meeting webinar indicated that a recording had started for a meeting that was set to be recorded.

Energy,

At this time, I’ve decided not to provide a report of last Thursday’s [Oct 24] IMEA board meeting highlights.  Instead, this is my personal commentary on that IMEA board meeting’s resource planning presentation. It represents my opinions, notes, and citizen knowledge of IMEA.

A copy of the resource planning slides extracted from the full set of board meeting slides is available here. I did not try to compare against the slides we previously received the week before the board meeting.

In my opinion, the presentation at the end of a long meeting was too fast and too full of one-sided stories that I’m not gonna repeat. Please, I encourage you to discuss with others who attended the webinar. And I also ask that you join me in making your own request to Naperville and IMEA to provide public access to IMEA’s video recording of the board meeting’s presentation.

My 5-part commentary [originally 4 with part 5 added in the second email]:

First and foremost: IMEA continues to offer us no apparent efforts or plans to consider alternatives that would support turning down the dial on that coal-fired ownership generation.

  • Nothing is apparently planned until such time as required by State or Federal legislation or regulations. 
  • We also learned earlier in the board meeting that Prairie State continues to pursue funding of the carbon capture “experiment”.  The Prairie State report slide listed: “Potentially explore the U.S. Department of Energy (DOE) Office of Clean Energy Demonstrations (OCED) for funding for carbon capture technology (NOI for funding issued by DOE)”

Second: IMEA continues to claim that IMEA makes resource decisions in open and transparent meetings. But I’ll assert that they are “forgetting” to tell the whole story when … .

When omitting mention of:

  • The apparent lack of involvement and opportunities for input from our elected city council representatives, not to mention citizen stakeholders who are the “public” in public power.
  • Apparently closed committee meetings in the development of the IMEA sustainability plan which was publicly revealed to us at the end of October 2023 IMEA board meeting after it was already developed
  • Closed planning meetings such as the 2 days of closed IMEA board meetings in Nov 2019 for which the full meeting minutes continue to be voted by the IMEA board to be withheld from the public nearly 5 years later

Third: With the addition of the latest 150 MW solar project, there is no apparent room in the resource portfolio for further clean energy resources without …

  • without turning down the dial on that coal-fired generation, or
  • without an increase in IMEA power supply demand to be able to add to the resource portfolio.

My notes recorded a statement by the IMEA CEO that the IMEA portfolio now allows you Members to watch and wait as technologies develop before choosing new resources. Seems to me that also tells us in Naperville that we should also watch and wait before signing any IMEA contract extension.

Fourth: As I explain further, IMEA’s description of PJM accredited capacity requirements seems to also leave out the whole story.

And it may be highly misleading when using language such as: PJM requirements  to have maximum peak load capabilities plus reserves. But I also acknowledge that I could be wrong in my understanding, and perhaps my research as an amateur citizen may be faulty. I’ve shared my research with our Naperville Electric Director, and it’s my understanding that he will discuss with IMEA. I’ll share with you what I hear further.

  • It’s my assertion that it’s an IMEA business decision whether/how to hedge (offset) the PJM market prices for capacity. These are costs that IMEA must pay through the PJM Locational Reliability Charge. Instead, IMEA words seem to state that it is PJM requirement that IMEA have the accredited capacity to meet IMEA peak load plus reserves.
  • My research plus evidence from IMEA’s Sept 2023 PJM settlement statement tells me that it’s IMEA’s responsibility as a Load Serving Entity (LSE) to pay for its share of the costs of the accredited capacity resources that are committed through the PJM capacity market processes. These processes are referred to as PJM’s Reliability Performance Model (RPM).  And the costs are paid by all PJM LSEs, including IMEA, through the PJM Locational Reliability Charge which is calculated using summer peak
  • An LSE may choose (but is not required) to offset all or part of the Locational Reliability Charge. One way is to offer owned resources in the capacity market and/or to use bilateral contracts to obtain RPM Auction credits. These credits offset the Locational Reliability Charge. In the Sept 2023 IMEA PJM settlements statement, there was such an RPM Auction credit of $447,853 that served to offset a substantial portion of the Locational Reliability Charge of $532,859
  • For IMEA, it is a business decision whether, how, and how much to hedge (offset) the market price for capacity as reflected in the Locational Reliability Charge. And in times of volatile capacity market prices, there may be even further reasons to choose to do so. But it is not a PJM requirement that IMEA must acquire accredited capacity. And it is not a PJM requirement that would directly prevent IMEA from adding renewable energy resources to its portfolio.

At the end of the day, IMEA does not tell us the whole story of accredited capacity nor does IMEA provide continued transparency to the related PJM charges and credits that are hidden/buried inside IMEA Purchased Power totals in the IMEA financial statements.

Further sources and details on IMEA’s PJM accredited capacity requirements and PJM charges to IMEA for its LSE share of accredited capacity are listed at the end of this email.

Fifth: In the concluding part of his presentation, the IMEA President and CEO repeated the disinformation on IMEA keeping the lights on.  

  • It’s disinformation that we have debunked and that I believe we must continue to debunk because apparently it’s still useful and effective for IMEA to keep repeating.
  • As he concluded his presentation, the IMEA President and CEO talked about IMEA managing the energy markets and the times when the wind doesn’t blow and the sun doesn’t shine.
  • Then he described IMEA staff in the IMEA control room 24 x 7 every day of the year “optimizing which resource  … the best cost … and keep the lights on for all 32 of our members … for the long term”.
  • Please I urge all of you to keep refuting this IMEA disinformation. It’s PJM and Naperville Electric that keep the lights on in Naperville, not IMEA.

Further below are resources to refute IMEA keeping the lights on:

—

Ending this email with a repeat of my ask that you discuss with others who attended the webinar.

And please also request a copy of the recording. Didn’t we hear that this is supposed to be open and transparent IMEA?

Thanks.

Greg

Further sources and details on IMEA’s PJM accredited capacity requirements and PJM charges to IMEA for its LSE share of accredited capacity:

Open Access Transmission Tariff
Attachment DD
Reliability Pricing Model
5.1 Introduction
https://agreements.pjm.com/oatt/5141

In accordance with the Reliability Assurance Agreement, each Load Serving Entity is obligated to pay a Locational Reliability Charge for each Zone in which it serves load based on the Daily Unforced Capacity Obligation of its loads in such Zone.  An LSE may offset the Locational Reliability charge for a Delivery Year, in whole or in part, by: (a) Self-Supply of Capacity Resources in the Base Residual Auction or an Incremental Auction; (b) offering and clearing Capacity Resources in the Base Residual Auction or an Incremental Auction (but only to the extent of the additional resources committed to meet Unforced Capacity Obligations through such Incremental Auction); (c) receiving payments from Capacity Transfer Rights; or (d) offering and clearing Qualifying Transmission Upgrades in the Base Residual Auction.

Reliability Assurance Agreement
Schedule 8
Determination of Unforced Capacity Obligations
https://agreements.pjm.com/raa/4176

A. For each billing month during a Delivery Year, the Daily Unforced Capacity Obligation of a Party that has not elected the FRR Alternative for such Delivery Year shall be determined on a daily basis for each Zone as follows:
Daily Unforced Capacity Obligation = OPL x Final Zonal RPM Scaling Factor x FPR
Where:
OPL = Obligation Peak Load, defined as the daily summation of the weather-adjusted coincident summer peak, last preceding the Delivery Year, of the end-users in such Zone (net of operating Behind The Meter Generation, but not to be less than zero) for which such Party was responsible on that billing day, as determined in accordance with the procedures set forth in the PJM Manuals, and as adjusted further to include the Obligation Peak Load associated with any Large Load Adjustment that may be allocated to the Party
Final Zonal RPM Scaling Factor = the factor determined as set forth in sections B and C of this Schedule
FPR = the Forecast Pool Requirement

PJM Manual 18: PJM Capacity Market
https://www.pjm.com/directory/manuals/m18/index.html#about.html

Two line items in IMEA’s Sept 2023 PJM settlements statement:

Charges for IMEA’s share of the costs of the accredited capacity resources that are committed through the PJM capacity market processes which may be offset by credits from the RPM Auction for self-supplied resources (owned and contracted resources)

Locational Reliability Charge of $532,859.70

From PJM Manual 18:
All LSEs pay a Locational Reliability Charge equal to their Daily Unforced Capacity Obligation in a zone times the applicable Final Zonal Capacity Price.
LocationalReliabilityCℎarge = DailyUCAPOblig * FinalZonalCapacityPrice
Each LSE that serves load in a PJM Zone or load outside PJM using PJM resources (Non-Zone Network Load) during the Delivery Year is responsible for paying a Locational Reliability Charge equal to their Daily Unforced Capacity Obligation in a Zone times the applicable Final Zonal Capacity Price for that Delivery Year.

My calculations to “unwind” / determine the average daily IMEA capacity obligation:
2023/2024 Final Zonal Capacity Price for ComEd: $34.18 MW-day
$532,859.70 divided by 30 days in Sept = $17,761.99 per day (avg for Sept)
$17,761.99   divided by $34.18 MW-day = 519.66 MW per day (avg daily unforced capacity obligation for Sept)

RPM Auction credit of $447,853.80

From PJM Manual 18:
RPMAuctionCredits = MWClearedLDA * RCPLDA
Each generation, demand, energy efficiency, or QTU resource provider that clears Capacity Performance sell offer segments in an RPM Auction will receive a Daily Auction Credit equal to the total MW amount that cleared in Capacity Performance sell offer segments times the applicable LDA  resource clearing price in such RPM Auction for the entire Delivery Year.

My calculations to “unwind” / determine the accredited capacity that cleared in the auction
2023 – 2024 BRA Resource Clearing Price (RCP) for Rest of RTO: $34.13 / MW-day
$447,853.80 / 30 days = $14,928.46 per day (avg for Sept)
$14,928.46  / $34.13 per MW-day = 437.40 MW-day (sold in the RPM auction)

Resources to refute IMEA keeping the lights on:

IMEA General Counsel’s words at the Winnetka IMEA presentation:
https://www.youtube.com/watch?v=4NpC9Fzbz8o&t=1981

“..and when the RTOs were first created
they really were thought of as controlling the wires
and controlling discriminatory issues about the wires

but what they really turned into is protecting the reliability of the wires
making sure there’s power flowing through the wires

and the way that they decided to do that was
to start an energy market and a capacity market
to control how the generators that connect to the wires are dispatched

so that we have a constant continuous flow of electrons flowing across the grid

so the grid doesn’t fall down and the lights don’t go out

so the RTOs essentially these days do all that stuff …”

PJM’s 3 priorities webpage with priority #1: Keeping the Lights On
https://learn.pjm.com/three-priorities

Al Karvelis’ Aug 20 public comments at city council.
https://youtu.be/R1UzGX23gOQ

My 3-part public comments in 2023 at city council: