Business leaders who often take on state or national topics through the Naperville Area Chamber of Commerce's legislative committee on Monday kept their focus closer to home as they quizzed city officials about proposed electric rate increases.
City council members, several of whom attended the legislative committee meeting, are recommending electric rate increases of 6 percent May 1 and 7 percent May 1, 2015, for commercial and residential customers.
Contact information ( * required )
The proposed increases would help address a shortfall in the budget of the city-owned electric utility, which is projected to be $14 million in the red by the end of next month.
"The news is not good; I'm not here to convince you that it is," City Manager Doug Krieger said.
Instead, Krieger explained some factors contributing to the deficit and fielded questions from business people such as Kevin Gensler, who leads the chamber's legislative committee, and Jeff Davis, who works for Phoenix Closures.
Krieger said the shortfall stems from higher costs Naperville has incurred to buy power from Illinois Municipal Electric Agency, a nonprofit electric delivery co-op the city joined in 2011 for a 24-year contract.
Gensler's questions included why the co-op, known as IMEA, has charged the city more than expected and how future Naperville electric prices will compare with ComEd prices.
Krieger said part of the explanation for higher costs is the city joined IMEA later than many of its other 33 members, who already had contributed toward developing the co-op's portfolio of electric sources. IMEA produces more energy than its members need and has not been able to sell that excess power at a high price lately, so Krieger said the co-op has passed along higher costs to its members.
"IMEA is recently at a much higher level of scrutiny, mostly from Naperville but from other communities as well," Krieger said. "They're under the microscope and will continue to be until performance stabilizes and improves."
Over the past few years, Naperville commercial electric customers have paid higher costs than customers serviced by ComEd or through municipal power aggregation contracts. But a ComEd rate increase is expected in June, and that will help bring Naperville's prices below or in line with ComEd for more business users, Kriegers said.
"It's already started to get better," Krieger said. "Now, sometimes we're cheaper, sometimes we're not."
Davis, whose employer, Phoenix Closures, has plastic plants in Indiana, Iowa and Tennessee in addition to Naperville, asked why businesses have not been able to opt out of Naperville electric service and seek their own power contracts.
Krieger said he recognizes businesses like Phoenix Closures might feel "held hostage," but commercial customers of municipal-owned electric utilities are exempt from a portion of state law that would allow them to seek other contracts.
Gensler said the chamber's legislative committee focused Monday on local issues to address questions it has been fielding from members.
"The chamber has been contacted by members about electric rates," Gensler said. "We wanted to give some of the local governments a forum to talk about some things and educate our members."