St. Charles considering extending power contract with swing coal for sustainability reasons – Shaw Local

Amid a nationwide push for clean, renewable energy, St. Charles faces a decision to agree to a long-term contract extension with its current coal-dependent energy supplier or consider other options.

About 50 St. Charles residents attended a June 24 meeting of the Government Services Commission to hear a presentation from representatives of the Illinois Municipal Electric Agency.

IMEA is a nonprofit energy agency that currently provides power to 32 municipalities in Illinois. St. Charles has been using IMEA energy since 2004 and has a contract with the energy supplier until September 30, 2035.

With 10 years remaining on the current agreement, IMEA is calling on St. Charles and other Illinois municipalities, such as Naperville and Winnetka, to enter into a new power sales agreement that would extend it through May 2055.

Charles Public Works Director Peter Suhr is the city’s representative to IMEA and a member of the IMEA board of directors. At the June 24 meeting, he made a presentation and IMEA representatives and told committee members that he supported extending the agreement beyond 2035.

“There really is no reason to join another joint action agency. There is no reason to create a new joint action agency. There is no reason to have short-term contracts with the openness to market volatility and price volatility,” Suhr said. “There is no reason to add staff and resources to simply say we are doing this all ourselves. But there is one very sensible solution, and that is to continue our long-term partnership with IMEA beyond 2035.”

However, committee members were hesitant to support the extension, largely due to concerns about sustainability, coal dependence and unclear plans for future clean energy production.

IMEA President and CEO Kevin Gaden, Director of Government Affairs Staci Wilson and General Counsel Troy Fodor made a presentation to committee members.

Reliability and durability

Representatives said sustainability, reliability and affordability are the main reasons for the city to extend its contract with IMEA, and said 20 of the 32 municipalities that make up IMEA have already made a long-term commitment.

Gaden said that through sound financial choices and long-term supply agreements, the agency has been able to provide municipalities with consistently low energy costs, with prices now 5% lower than when St. Charles in 2004 said IMEA intended to repay all of its long-term bonds by 2035, which he believed would reduce energy costs for municipalities by about 25%.

Gaden also praised IMEA’s reliability, citing as an example an average outage restoration time of 16 minutes, compared to more than an hour for ComEd.

Currently, about 11 percent of IMEA’s energy comes from carbon-free renewable sources, which Gaden said is the highest of any energy provider in Illinois. He said only about 6 percent of ComEd’s energy currently comes from non-carbon-emitting sources.

The percentage of renewable energy supplied by IMEA could approach 30 per cent by 2035, and they aim to deliver net-zero emissions energy by 2050, he said.

IMEA owns a 15% stake in Prairie State, a coal-fired power plant in southern Illinois that is the state’s largest emitter of planet-warming CO2 and is among the top 10 emitters of CO2 in the U.S., according to a 2019 study by the Environmental Protection Agency.

Wilson said IMEA has been diversifying its energy portfolio in recent years, adding solar, wind and hydropower, as well as battery storage. But Hayden said about 80 percent of the company’s energy is still generated from coal.

Under a timeline presented at the meeting, the Prairie State plant is scheduled to close half of its plant by 2038, reducing CO2 emissions by 45 percent, and then phase it out completely by 2045. IMEA is also seeking information from Trimble County, another Kentucky coal-fired plant scheduled to be retired by 2050.

With almost 11 years left on the current contract, several council members wondered why another 20-year commitment was needed so quickly, and were hesitant to support an extension because of the short time frame the city had to make a decision that would affect residents for the next 30 years.

Councilman Ron Silkaitis expressed concerns about the length of the commitment, the short time frame to implement it and the amount of energy that continues to be supplied from coal.

“It worries me that we only have one year to decide on a 30-year contract. This is a big commitment for residents and that worries me,” Silkaitis said. “A lot of these residents’ concerns are about coal, and a large percentage of our electricity will be generated from coal for the next 20 years, so that’s another concern and I would like to consider other options.”

IMEA wants to make a commitment now to get enough power through long-term contracts at better rates, Gaden said. Without knowing how many municipalities the agency will serve after 2035, it’s hard to estimate how much power they’ll need to supply, and the extra time will allow them to get the best possible rates through long-term contracts, he said.

Gaden told the committee that there is currently no energy supplier in the country that can provide electricity to any city without using coal.

Councilman Jayme Muenz asked IMEA representatives about the possibility of implementing carbon capture technology at the Prairie State facility, but Wilson told committee members the board would not support carbon capture because it did not make economic sense.

Comment cards were distributed to those present to collect questions from the audience. Many of them concerned the use of coal, carbon capture, future bond issuance and where energy will be obtained after the closure of coal-fired power plants.

Wilson said it plans to continue replacing coal-fired power with renewable energy sources such as wind and solar, and hopes to add battery storage to its portfolio by 2030.

“We are a nonprofit organization. If new technology comes along and we don’t need coal, we will get rid of it,” Wilson said. “We are not a coal company that makes money off of it. This is a diversified portfolio that is reliable and affordable.”

The city has until April 2025 to make a commitment, and officials will continue to discuss the decision at future meetings.