Naperville halts negotiations with electricity supplier
Naperville City Council members are shutting down further contract talks with the Illinois Municipal Electric Agency — at least for now.
City council members voted 6-3 on Tuesday to pause contract talks with the city’s energy provider, but left open the door for future talks if a majority of the council requests it.
“We are in a rapidly changing market,” Councilwoman Mary Gibson said. “If Naperville’s needs don’t dictate that we make those long-term decisions now, we should wait until those needs dictate that we start looking at our future options.”
Naperville’s existing contract with IMEA remains in effect until 2035. IMEA approached its member communities, including Naperville and St. Charles, seeking approval of a contract extension that would secure terms through 2055.
In August, St. Charles council members rejected IMEA’s contract extension terms but left the door open for future contract talks. Naperville council members in August also voted 7-2 to continue negotiations, but demanded certain conditions be met before the city approves an extension.
The two sides have not been able to come to an agreement on those terms, some of which included an early-out clause that would allow the city to terminate the contract 10 years before the proposed 2055 expiration date. The city also sought weighted voting rights, revised terms that would allow them to secure a portion of their base load on the open market and guarantees on carbon-free emissions.
Tuesday’s decision ends contract talks with IMEA until a majority of the council wants to resume talks. Council members gave no indication when, or if, they would consider reopening talks.
“IMEA is disappointed that the City of Naperville has chosen to pause consideration of our long-term power supply offer, which 29 other member communities have approved,” Staci Wilson, IMEA's vice president of government affairs and member services, said in an email Wednesday.
“IMEA will continue to reliably and affordably serve Naperville’s wholesale power needs through 2035 and will now focus long-term planning on the 29 members that have executed extensions,” she added.
In addition to St. Charles and Naperville, IMEA members include Winnetka and several downstate communities. The agency was seeking contract extensions so it could determine base load as it negotiates contracts to meet future power needs.
Opponents to the extension have argued that Naperville does not need to negotiate this far in advance and that the city should seek a cleaner source of power, noting that IMEA heavily relies on Prairie State Energy’s coal-fired plant in southern Illinois.
Proponents argued that IMEA is moving towards net-zero carbon emissions by 2050 and has provided the city with affordable, reliable power for more than a decade.
Mayor Scott Wehrli also noted that ending talks effectively locks the city into its current terms for the next 10 years. A contract extension would have allowed the city to take advantage of the new terms upon approval.
“I don’t see what we gain by walking away now,” he said.
Naperville recently sought bids from independent energy providers to determine pricing for a “member directed resource” option under the proposed extension that would allow the city to procure a portion of its energy on its own. In that process, 552 companies received the information, 34 downloaded the application and only four sent in responses, Wehrli said.
Those bids, he said, would increase electric rates “by a significant percentage” if adopted now. The city has not shared those bids, citing confidentiality clauses by the companies that submitted bids.
Wehrli suggested that if the city waits to go out to the open market in 2029, six years before the city’s contract with IMEA expires, those results could be worse if predictions of a volatile electricity market on the horizon hold true.
“Hope is not a strategy — options are,” he said.