Batavia aldermen decided Monday that it is worthwhile to give incentives of more than $7.5 million to keep plastic-goods manufacturer Suncast Corp. in town as it expands production.
The city council unanimously approved a master sales agreement for electricity for Suncast's main plant, at 701 N. Kirk Road.
The city will pay for up to $250,000 of work to upgrade electrical service to the plant to accommodate the increased demand from the expansion.
Any electricity the plant uses annually, above 61 million kilowatt-hours, will be sold to Suncast for the next 10 years at market rate if that rate is lower than what Batavia charges.
And the city will rebate up to $7.5 million to the company, over seven years, for the first 50 million kilowatt-hours of electricity the plant uses from 2014 through the end of 2019.
The rebates, however, also depend on whether the city receives an expected $7.5 million in road construction money from the state. The state money would go into the general fund; the general fund would then transfer money to the city's electric fund.
If the road grants don't come through, Suncast doesn't get a rebate.
"There really is no perfect solution," Alderman Lucy Thelin Atac said before the vote.
Public works director Gary Holm said he believed Suncast officials when they showed city officials plans to shut the plant and move production elsewhere, due to the increased cost of Batavia electricity.
Suncast is Batavia's top electrical customer, using about 12 percent of the load. And Batavia has obligations to pay for certain amounts of electricity, whether its customers use all of the electricity or not.
"They (Suncast) would have a big impact on every other customer in town ... if they were to leave," Holm said.
Suncast employs about 1,200 people at the factory and a nearby warehouse. Only Fermilab employs more people in Batavia.
The city will also pay Suncast $231,000 in an incentive tied to what Suncast paid for electricity from August 2011 through July 2013.