‘A big decision’: St. Charles considers future energy options as deadline looms, protesters decry coal

St. Charles City Council members reviewed their options Monday for the city’s future energy provider for the first time amid pressure to cut ties with its coal-reliant provider.

With three weeks until the Aug. 19 deadline to approve a proposed 20-year energy contract with the city’s current provider, a consultant presented Council members with alternative options during a July 28 Government Operations Committee meeting.

St. Charles still has 10 years left on its current power contract with Illinois Municipal Electric Agency, or IMEA, but the agency is urging St. Charles and other municipalities to enter into new 20-year contracts that would last through 2055.

IMEA proposed the new contract to the city over a year ago and has been a source of concern among residents with hesitations over the agency’s reliance on coal.

In May, Mayor Clint Hull initiated a task force called the St. Charles IMEA Working Group, which has been gathering data to help the City Council make an informed decision on whether to renew the IMEA contract.

The task force hired Kessler Energy Consulting LLC to assist in the evaluation. Owner Shawn Kessler presented the group’s findings to the Council for the first time during Monday’s committee meeting.

IMEA is a joint action 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 Sept. 30, 2035.

Kessler said if the city does not approve the proposed contract, it has several alternative options, including negotiating new terms with IMEA, finding a new full-service provider, joining a different joint action agency or self-supplying.

No matter the city’s decision, IMEA will continue to provide power through the end of the current contract.

Earlier the same day, protestors with signs called on City Councils in St. Charles and Naperville to “Say ‘No’ to Coal,” during a news conference outside the Naperville Municipal Center.

IMEA owns a portion of coal power plants Prairie State Energy Campus in southern Illinois and Trimble County Generating Station in Kentucky. The agency plans to continue sourcing from Prairie State until 2045 and from Trimble until 2050.

Kessler said while IMEA has plans to be emission-free by 2050, the agency has made no commitment to do so. He said about 80% of the energy in St. Charles comes from coal, and the majority of energy from IMEA will continue to come from coal until at least 2038.

Kessler added that even if St. Charles opts to end its contract with IMEA after 2035, the agency will keep sourcing same amount of energy from its coal plants.

Per the city’s current contract with IMEA, rates for products and services are not fixed. Kessler said the proposed contract is nearly identical to the city’s current contract, with some minor additions.

One change in the proposed contract is that St. Charles will be allowed to source a portion of its energy from renewable sources. Under the new contract, members will be allowed to procure up to 10% of their peak billing demand from renewable sources, however Kessler said that equates to about 3% of their total energy.

Another change that would occur during the new contract period is the retirement of debt on two of IMEA’s coal plants in 2035, which IMEA expects will decrease the city’s energy costs by 25%.

Kessler said negotiating a new contract with IMEA would be subject to approval by the agency’s board.

The potentially most feasible alternative presented was to find a new full-service provider. Kessler said the search could be done through the competitive bidding process, and would take about six months to complete.

Should the city decline the proposed contract, Kessler said there are several full-service energy providers who could replace IMEA. If the city choses to find a new provider, he said those negotiations should begin in 2029 or 2030, to ensure a contract is in place by 2035, when the current IMEA contract expires.

Kessler said one misconception he has heard was that alternative providers can’t offer the same reliability as IMEA, which he said is not true.

“There are plenty of qualified service providers in the market,” Kessler said.

Kessler suggested that full-service energy companies like Constellation, NextEra, AEP, MidAmerican and NRG could provide the same energy as IMEA but from renewable resources.

Kessler said full-service providers offer contracts of one to 12 years at fixed or variable rates and can be easily adjusted to account for new growth and development. They will also contract with renewable developers on behalf of the city to diversify the energy portfolio, at the city’s request.

The task force did not recommend joining a different joint action agency or self-supplying, as both were expected to be time intensive and impractical.

Kessler said a different joint action agency would likely have similar rates and structures to IMEA, and self-supplying would require the construction of a new facility for round-the-clock management.

Kessler said with future energy costs uncertain, no matter the provider, the decision comes down to whether the city would rather continue its relationship with IMEA or explore renewable energy options.

“You’ve got a big decision to make pretty quickly here,” Kessler said. “Both paths include uncertainty over power supply costs. Each has pros and cons depending on what you want.”

“It’s a big decision for the city,” Hull said. “There’s still a lot of work to do, but I’m just very proud and very appreciative of everything that has been done.”

City Council members are expected to make a final decision on the IMEA contract at their Aug. 18 meeting. If further review is needed before then, the item will be brought to an August Committee of the Whole meeting agenda for more discussion.