The Rochelle Municipal Utilities electric department saved nearly $2.9 million through its generation plant in 2025, RMU Superintendent of Electric Operations Blake Toliver said.

The generation plant at 127 N. Ninth St. has dual-fueled engines that run on diesel fuel and natural gas and it is used as a peak power shaving plant on hot days during the summertime when residents and businesses are running their air conditioners and putting stress on the power grid. That saves the city from having to pay for capacity and transmission costs of buying power off the grid to meet increased demand.

Total savings from 2025 was $3,948,123. After $1,081,607 in operating costs, the net savings to the city and RMU was $2,866,516.

“If we didn’t have the generation plant here, we wouldn’t have those savings,” Toliver said. “That means the customers would ultimately be on the hook for those expenses. We’ve had a lot of city council support for generation and we’re looking at newer generation and more generation. The more generation we have online, the more money we’ll save. I think it’s a great asset to have. And we can also use the engines to power portions of the city if it goes dark as backup generation.”

Toliver said the generation plant typically saves the city between $1.5-2 million per year. He said the increase this year is due to rising power prices. He believes the power market will continue to see rising prices which will bring about more savings for Rochelle through generation.

RMU has long-term power contracts locked in that have protected its customers from large rate increases that area investor-owned utilities have seen recently due to higher power prices.

“The city having these engines is just going to become more and more lucrative for the utility,” Toliver said. “The city having long-term power contracts with generation on site is huge for RMU. It means more to have those things now in a volatile time for power costs. I think the power market is going to get worse before it gets better. And I think we’re going to have some years of some pretty significant savings here. Now is the time to reinvest in that utility and get every dollar that we can while we can.”

RMU and the city are considering purchasing dual-fuel turbines that would be fueled by natural gas and diesel fuel and possibly hydrogen in the future. The potential two 10-megawatt turbines would be located on Caron Road and would replace six Caterpillar diesel engines at the location that would be sold.

Toliver said the turbines would be “much more efficient, modern and easier to maintain” than the engines. The turbines would add 10 megawatts of power to the city’s capabilities if the move was made, making it able to cover “almost all” of Rochelle’s daily power capacity.

“It would be a significant amount of money that we would be saving,” Toliver said. “I think it would be more than enough to make the payments on bonds or however the city would pay for it.”

The RMU generation plant has five employees and its run season is from June 1-Oct. 1 when peak temperatures and power needs take place. The plant also runs occasionally during the winter if extremely cold temperatures are seen. Outside of the run season, employees work on maintenance of engines. 2025 saw the plant’s first year in many without any mechanical failures to engines.

Generation is not common among other publicly owned utilities like RMU. Rochelle started its electric utility in 1896 and was an independent generating entity until 1971, when the city tied to the grid. Instead of mothballing the generators in 1971, the city saw it as an opportunity to make money in the market and provide redundancy for members of the community.

“I think RMU is a good use case for utilities that are still running their own generation,” Toliver said. “The savings you can have with adding more generation and having your own generation can be paramount for a utility of our size. We are very lucky to have generation. We are very fortunate to have city council support for moving forward with this. We’re seeing a lot of city councils that are mothballing their generation plants throughout the country.”

Toliver said RMU rates would be “significantly higher” if the city did not have generation capabilities. Generation has brought a net savings to RMU six of the past seven years.

“I encourage our customers to learn about our utility and what we do for our residents and ratepayers,” Toliver said. “We’re doing everything in our power to make sure we maintain stable rates and do infrastructure upgrades to make our system more reliable.”