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
- 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:
- 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.
- 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
- 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
- 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.
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?
- Staff recommends that the IMEA does not close the opportunity for members to approve IMEA’s contract offer
—–
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