20 IMEA Member Municipalities Have Embraced the Opportunity to Continue their Beneficial Relationship with the Agency

Date Posted: 2024-06-28

For the second meeting in a row, the IMEA Board has approved contracts from 10 agency members seeking to extend their beneficial relationship with IMEA through 2055.

At its June 27 meeting, the IMEA Board accepted new Power Sales Contracts with Bethany, Breese, Chatham, Farmer City, Freeburg, Highland, Metropolis, Rock Falls, Sullivan, and Waterloo.

Back at its April 25 meeting, the IMEA Board accepted new contracts for Altamont, Bushnell, Casey, Flora, Greenup, Marshall, Oglesby, Princeton, Rantoul, and Roodhouse.

This action means that 60% of the agency’s municipal members have voted to retain their long-term affiliation with the agency within the first few months of the window of opportunity to do so.

The contract offering, which was unanimously approved by the IMEA Board of Directors attending its February 15, 2024 meeting, represents a continuation of the relationship of the municipal electric systems with the IMEA, a unit of local government formed by the municipalities in 1984. Current IMEA member municipalities have until April 30, 2025, to execute the contract.

The IMEA is charged with procuring reliable, affordable, and sustainable wholesale power for its municipal members and has done so for 40 years.

“The Agency certainly has been successful in its mission,” said Cory Sheehy, who is the Director of Public Works for the City of Marshall, IL, and the Chairman of the IMEA Board of Directors. The numbers bear that out. The average cost of power to members for fiscal year 2024 was 3.8% lower than the original budget amount, and the average costs to members over the last three fiscal years has been remarkably consistent following the pandemic in fiscal year 2021.

The IMEA offers its municipal electric systems several advantages that other wholesale suppliers can’t provide. Foremost is direct involvement in all decision making related to the cities’ and villages’ power supply. Each IMEA member community has a voting representative on the IMEA Board of Directors. Input from each member community has not only been instrumental in forming policies that have assured a reliable, affordable, and sustainable energy supply, but it has also resulted in the agency’s providing value-added services that are tailor-made to serve the specific needs of Illinois municipal electric systems. These services include help with federal compliance issues, transmission and sub-transmission contract negotiation, representation in regional transmission organizations, and agency-managed programs to expand energy efficiency incentives to member communities and residents, to reduce resource capacity needs by accelerating demand response options, and to advance electric vehicles and EV infrastructure. In addition, agency personnel provide engineering, technical, legal, and programmatic support to members’ electric utility staffs.

The new contract that has been offered to IMEA members is a product of a working group of IMEA board representatives. “The obvious question,” said Sheehy, “is that if the current contract does not end until 2035, why are we asking members to extend their contracts in 2024.” The answer, according to the working group, is this: IMEA needs to work now to secure new renewable projects to transition and replace resources that are going offline between now and 2035. Without extensions with its member cities, IMEA can’t make agreements to procure power supply for members beyond 2035. The best renewable energy supply deals are 20-year deals that typically offer 20% to 30% lower pricing than short-term deals. With only 11 years left on the member contracts, IMEA can’t execute those 20-year deals at this time. IMEA needs to know how much new power to acquire to serve member needs beyond 2035, so the agency needs to know now who those members are that will continue their beneficial relationship with the municipal joint action agency beyond 2035.

Plans include adding 130 MW of solar in the 2025-26 timeframe and replacing an expiring wind contract in 2030.

“Conceptually – and formally – the new contract is much the same as the current contract that has served members well for so many years,” said Sheehy. The IMEA municipal members still retain governance over the organization, and the infrastructure that provides member municipalities with their value-added services is already built into the agency. IMEA member electric systems that own their own qualified local generation units are also being offered an extension of their capacity purchase agreement. Under that agreement, the agency compensates the city for the agency having the ability to call on its municipally owned generation units and pays the fuel costs for those units when they run during critical times of high demand on the electric grid.

There is also one new offering in the contract whereby a member municipality can subscribe a percentage of its peak demand in Illinois-based renewable and carbon free resources. This option, called a “member directed resource” (MDR), can begin as soon as a member extends the contract with IMEA.

“We realize that considering a long-term contract for wholesale power supply is an important decision for a village or city,” said IMEA President & CEO Kevin Gaden. “I hope the productive relationship that each of the member municipalities has had with this agency – an agency that they themselves collectively govern – will make that decision easier. IMEA staff are happy to attend city council meetings to explain the advantages of the contract and answer any questions city or village leaders may have. IMEA staff has been proud to serve our member municipalities for the past forty years, and we are looking forward to continuing those relationships.”