It pains me to admit this.
Winnetka’s power is not very clean. We are more dependent on coal than most every other town in Northern Illinois. When it comes to renewable energy, neighboring communities are set to reach much higher targets. Making matters worse, many North Shore towns have an opportunity to cut electricity rates (supply portion) up to 25% and get 100% green power. This option is not available in Winnetka. Unlike most Northern Illinois residents, Winnetkans do not purchase power from ComEd. In 2007, the Village entered into a long-term contract with the Illinois Municipal Electric Agency (IMEA) to supply electricity for its residents. IMEA, a non-profit municipal utility, is a consortium of 32 municipalities that own and operate municipal electric distribution and possibly generation.
Winnetka’s power provider (IMEA) presents some
UNIQUE EXEMPTIONS most residents are likely unaware of:
IMEA is exempt from independent oversight and power procurement regulations
While ComEd electric service is subject to vigorous regulation and oversight from the Illinois Commerce Commission and consumer protection by the Citizen’s Utility Board, municipal utilities are not bound by these rules. IMEA is governed by a board of directors that is appointed by its members. The Village of Winnetka has input as a member, also the Village’s Electric Department Director serves on the IMEA Board. However, residents do not have an independent consumer advocate overseeing this agency and the power sources it selects.
IMEA is exempt from environmental disclosure requirements
Most utilities operating in Illinois are required to include environmental disclosure information in customer’s bills each quarter, reports can also be found on this webpage. Unlike ComEd, IMEA does not disclose information on the sources of electricity, emissions of air pollutants, emissions of greenhouse gases, quantities of nuclear waste generated and the sale of renewable energy certificates (RECs). Without easy access to this information, consumers cannot fully understand the environmental impact of their power.
IMEA is exempt from renewable portfolio standards
The Illinois Renewable Portfolio Standard (RPS) requires most electric utilities in Illinois, including ComEd, to procure 25% renewable energy by 2025. IMEA set a voluntary goal to acquire approximately 5% of its energy requirements from renewable resources. Toward that goal, IMEA entered into a 20-year contract with NextEra for wind power in Lee and DeKalb counties. While IMEA may be close to reaching the state goal for 2012, no plans exist to expand renewable energy to keep pace with the state’s 25% goal. Recently, IMEA has re-optioned property suitable for a natural gas-fire plant. Will IMEA first meet new generation needs with renewable sources before adding more fossil fuel power to the mix?
IMEA is exempt from energy efficiency portfolio standards
The Illinois Energy Efficiency Portfolio Standard (EEPS) requires most utilities to reduce overall electric usage by 0.2% of demand in 2008, escalating to 2.0% by 2015. Utilities, such as ComEd, provide a substantial budget for rebates to their customers that make electric energy efficiency upgrades. IMEA does offer residential energy efficiency information guides, a Recycle My Fridge program, and commercial/industrial efficiency rebates. Although IMEA’s reduction targets are unknown, the agency claims funding levels are in line with regulated utilities. Energy efficiency has been proven to be the most cost effective form of energy, as the capital costs of new generation can be avoided. Will IMEA pursue more robust energy efficiency measures to reduce demand before adding new generation capacity?
IMEA’s heavy dependence on coal is not cost effective
This coming year, Winnetka will pay a whopping 35% more for dirty coal power than Kenilworth’s clean energy (see the updated post…Winnetka Pays Up for Dirty Power). In the recently published report “The Prairie State Coal Plant: The Reality vs. the Promise,” the Institute for Energy Economics and Financial Analysis suggests the investment in the new Prairie State coal plant has contributed to rising power prices, with no relief in sight. IMEA and Village officials have downplayed coal’s role in our higher electric bills. However, it turns out in 2013, 80% of IMEA’s power will come from burning coal. IMEA is locked into 61% coal power from ownership of large, coal-fired power plants, including 15% ownership in the newly constructed $4 billion Prairie State coal plant and coal mine (Illinois) and 12% in the Trimble County plants (Kentucky). Only 6% comes from a wind energy contract. Does this seem like a diverse energy portfolio that hedges risk? No one has a crystal ball when it comes to energy markets. If IMEA plans to achieve “long-term cost stability at competitive prices for its members” why are they heavily speculating on coal? Prairie State is the only new coal plant in the U.S. to come on line in 2012 for good reason. The electric industry is turning elsewhere because coal is not economically viable, being displaced by natural gas and renewables. We should take notice that the City of Batavia is trying to sell part of their share of Prairie State. In terms of rates, IMEA’s annual report shows an upward trend in member’s cost per kWh over the past decade. And surprisingly, IMEA board minutes indicate they are dipping into the Rate Stabilization Fund to keep member’s costs lower. Furthermore, a future cost on carbon emissions could cause consumer rates to soar. Utilities that have invested in a diverse energy portfolio adequately balanced with renewable energy will be less vulnerable to volatility in fossil fuel prices.
Winnetka residents do not have the option of switching to an alternative electric provider
In March 2012, many Illinois communities voted to bundle residents’ electricity load and bargain with electrical providers (other than ComEd) for cheaper rates and greener power (see wren post CUT YOUR ELECTRIC BILL AND GET GREEN POWER). Winnetka consumers cannot choose a different provider. The Village of Winnetka is contractually bound to IMEA until 2035.
IMEA’s lobbying efforts appear to protect coal interests
IMEA organizes legislative rally days for members to lobby Congress on their “concerns,” as reported in the Muni Line newsletters. Since locked into coal, is IMEA protecting the price of burning coal at the expense of public health? Does their stance contribute to environmental degradation? The agency’s legislative efforts and those of Village employees, particularly relating to climate change and pollution control policy, should be completely transparent and carefully balanced.
IMEA’s mission is out of synch with the State of Illinois objectives
Illinois law requires most electricity providers to submit procurement plans for “adequate, reliable, affordable, efficient, and environmentally sustainable electric service at the lowest total cost.” IMEA is focused on providing “adequate, reliable, affordable and price-predictable power” to its members. Environmental sustainability is absent from this mission and not mentioned in the 2011 annual report. Although municipal utilities are exempt, consumers should hold IMEA accountable to the same standard. Winnetkans expect reliable electric service, affordable rates and great customer service. Like other Illinois electric consumers, we should have the opportunity to be more environmentally responsible. Without stockholders, non-profit municipal utilities are obliged to serve public interests and local values. IMEA needs to factor environmental sustainability into power procurement decision making, reflecting customer demand and Illinois goals for renewable energy, energy conservation and pollution prevention.
At what price?
Our electric bills don’t reveal the true cost of coal. Coal-fire plants are the most polluting source of energy. Coal is dirty throughout its lifecycle, from the mining and shipping to burning and disposing (of ash). According to the Clean Air Task Force’s Toll From Coal, Illinois currently ranks seventh highest in the nation for public health impacts due to coal plants (when considering the number of deaths, hospital emissions and heart attacks). Consequently, Illinois spends hundreds of millions of dollars each year in coal-related medical bills, missed workdays and lost productivity. Coal plants are also single largest contributor of global warming pollution in the world. Other environmental burdens include smog, acid rain and mercury-contaminated fish. When assessing the true cost of pulverized coal plants, they are anywhere from 9 cents – 27 cents per kWh more than what we actually pay. Clean renewable energy avoids the environmental, health and economic consequences of burning fossil fuels. Fortunately in Illinois wind energy is abundant, cost competitive and reliable. The wind power industry is also good job creator and economic driver in Illinois (see wren post RISE OF RENEWABLES).
Winnetka cares about the environment
Winnetka is clearly interested in energy and environmental issues. The 2007 Village Caucus found that 68% of the respondents favored economic incentives to reduce energy consumption and encourage environmentally friendly activities. More and more, we see neighbors greening their homes, residents driving fuel-efficient cars around town, and businesses offering sustainable products and services. Many earth friendly families, outdoors enthusiasts, nature lovers, informed citizens and professionals in eco industries live here. The Chamber of Commerce and local groups organized the first Winnetka-Northfield Green Fair last year. Steve Schilling, assistant executive director of SWANCC, once noted Winnetka has one of the highest recycling rates in Northern Cook County. Winnetka volunteers also organize some of the largest rummage sales in the country. The Village has made strides with its electronics recycling, battery recycling, safe drug disposal and Tree City preservation efforts. Other municipal initiatives include participating in the Metropolitan Mayors’ Greenest Region Compact, converting to LED traffic lights, following Clean Fleet protocols, and auditing energy usage in Village buildings. The Environment and Forestry Commission is working to implement its Strategic Plan enacted in 2009. The #1 principle is to “reduce energy consumption and increase the use of renewable and non-fossil fuels for energy.” The question is, how can Winnetka’s environmental concerns influence IMEA’s power choices? Recently, IMEA has shown leadership by building its new Springfield headquarters Silver LEED-qualified with geo-thermal heating and cooling. We need to encourage IMEA to move forward with these renewable efforts on a bigger scale.
Personally, when it comes to green power, I want to keep up with the Joneses in Glencoe, Kenilworth, Wilmette, Highland Park, Evanston, etc. Perhaps shedding some light our power service will lead to cleaner electricity in Winnetka homes.
See updated post…Winnetka Pays Up for Dirty Power.
Thank you Sarah Wochos, Senior Policy Advocate from the Environmental Law and Policy Center, for your input and fact checking on this issue. Also, thank you Brian Keyes, Director of Winnetka Electric Department, for meeting with me and discussing my concerns, and Doc Mueller, Senior VP Government Affairs at IMEA, for providing me with some data.