St. Charles considers extending power contract with hesitation over coal, sustainability concerns

Amid a national push toward clean, renewable energy, St. Charles faces a decision to either agree to a long-term contract extension with its coal-reliant energy provider or explore other options.

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

IMEA is a nonprofit power supply agency that provides power to 32 municipalities in Illinois. St. Charles has been sourcing its power from IMEA since 2004 and is under contract with the energy provider until September 30, 2035.

With more than 10 years left on the contract, IMEA is urging St. Charles and other Illinois municipalities such as Naperville and Winnetka to enter into a new power sales contract that would extend the agreement through May 2055.

St. Charles Director of Public Works Peter Suhr is the city’s representative with IMEA and is on the IMEA executive board. He introduced the IMEA representatives at the June 24 meeting and told committee members that he supports extending the contract past 2035.

“There is really no viable reason to join another joint action agency. There is no viable reason to form a new joint action agency. There is no viable reason for short-term agreements with openness to market volatility and price instability,” Suhr said. “There is no reason to increase staff and resources just to say that we do it all ourselves. There is, however, one very viable solution and that is to continue our long-term relationship with IMEA beyond 2035.”

Committee members, however, were hesitant to support the extension mainly because of concerns over sustainability, coal reliance 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 gave the presentation to committee members.

IMEA president and CEO Kevin Gaden speaks at a St. Charles Government Services Committee Meeting on June 24, 2024.

Reliability and sustainability

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

Gaden said thanks to its strong financial choices and long-term procurement agreements, the agency has been able to provide municipalities with consistently low energy costs with prices 5% less than they were when St. Charles joined in 2004. He said IMEA is set to pay off its long-term bonds by 2035, which he said would reduce energy costs to municipalities by about 25%.

Gaden also touted IMEA’s reliability, citing an average time of 16 minutes to restore power after an outage, compared with more than an hour with ComEd.

About 11% of the power IMEA provides comes from renewable, non-carbon emitting sources, which Gaden said is the highest of any power supplier in Illinois. He said only about 6% of energy provided by ComEd comes from non-carbon emitting sources.

The percentage of renewable energy IMEA provides could be closer to 30% by 2035 and its goal is to provide net-zero emission energy by 2050, Gaden said.

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

Wilson said IMEA has been diversifying its energy generating portfolio to add solar, wind and hydro power, as well as battery storage in recent years. However, Hayden said about 80% of the energy it provides still is generated from coal.

According to a timeline presented at the meeting, the Prairie State facility is set to shut down half of the plant by 2038, cutting the plant’s CO2 emissions by 45%, and fully retire the plant by 2045. IMEA also sources from Trimble County, another coal-burning power plant in Kentucky, which is planned to be retired by 2050.

With almost 11 years left on the contract, several alderpersons questioned why another 20-year commitment has to be made so soon and were hesitant to support the extension because of the short notice the city was given to make a decision that will affect residents for the next 30 years.

Alderperson Ron Silkaitis expressed concerns with the length of the commitment, the short amount of time for officials to make the commitment and the amount of energy still being supplied by coal.

“It troubles me that we only have a year to decide on a 30-year contract. That’s a big commitment for residents and that concerns me,” Silkaitis said. “A lot of these residents’ concerns are about coal and a big percent of our electricity is going to be generated by coal for the next 20-odd years, so that’s another concern and I’d like to look at other options.”

IMEA wants a commitment now in order to procure the right amount of energy in long-term agreements with better rates, Gaden said. Without knowing how many municipalities the agency will be serving after 2035, it is hard to gauge how much energy it will need to provide and the additional time will allow it to get the best possible rates through long-term agreements, he said.

Gaden told the committee there is no energy supplier in the nation that can provide power to any city without the use of coal.

Alderperson Jayme Muenz asked IMEA representatives about the possibility of implementing carbon capture technology at the Prairie State plant. Wilson told committee members that the board would not support carbon capture because it does not make economic sense.

Comment cards were passed out to those in attendance to collect questions from the audience. Many questions were related to the use of coal, carbon capture, the issuance of bonds in the future and where energy would be sourced from after the coal-burning plants were decommissioned.

Wilson said the plan is to continue to replace energy sourced from coal-burning plants with renewable energy sources such as wind and solar and that they hope to integrate battery storage into their portfolio by 2030.

“We’re nonprofit. If there is a new technology that develops and we don’t need that coal, we’re going to get rid of it,” Wilson said. “We’re not a coal company making money off of this. It’s a diversified portfolio to make sure we’re reliable and affordable.”

The city has until April 2025 to make the commitment. City officials said they will continue the discussion at future meetings.