Naperville City Council had its first reading of proposed increases in city electric rates recently, and the conversation turned a little testy at times.
City staff recommends increases of 6 percent May 1 and 7 percent May 1, 2015, but the city’s Public Utility Advisory Board suggests raising it 7.86 percent the first year and 7 percent the second.
The city’s plan would cost the average homeowner $97.79 more for the first year and $103.75 more for the second. The advisory board plan would have yearly hikes of $99.21 and $105.37.
“We think it’s poor practice to run a business with a negative cash flow,” John Krummen, chairman of the Citizens Utility Advisory Board said, stressing that the board wanted increases that would “get us to zero” as far as the deficit goes the fastest.
Naperville owns it own electric utility and is part of the Illinois Municipal Electric Agency, a 32-member consortium of municipalities that purchase energy from a variety of different sources. IMEA purchases a portion of its electricity from the Prairie State Energy Campus and coal mine, which experienced construction cost overruns and delays in increasing its operating capacity.
Uncertain weather patterns have also contributed to a volatility in prices, as did low natural gas prices in recent years, making coal-generated electricity less affordable for IMEA.
Becasue of that, Naperville’s electric utility is currently operating in the red to the tune of about $14 million.
The plan suggested by city Staff would help stop the bleeding, but still leave the utility $5.2 million in the hole.
Councilman Joe McElroy bristled at Krummen’s tone concerning the proposal, pointing out that Krummen talked about poor business practices no fewer than three times in his comments.
McElroy said that he understood that it was not ideal to run a negative cash flow, but noted that the City Council had the public to consider.
“We have to balance that against the financial pressure we put on our residents,” he said.
McElroy also that he was “shocked at the cavalier attitude” some utility board members displayed toward people that might be opposed to the increases, noting that at one meeting he heard one someone say that if people weren’t happy with the board’s suggested increases, they could move out of Naperville.
Krummen said he took “umbrage” at McElroy’s comments and questioned whether McElroy really heard the comment.
“Was I hallucinating that night,” McElroy shot back.
Krummen indicated he didn’t know what McElroy had heard.
While Krummen made a point to praise the performance of the city’s utility and staff in handling the rate problem, and stressed he had no knowledge of mistakes made at Prairie State, he still wanted more access to the IMEA decision-making process.
“We just want to get more detailed information,” he said. “Why was this plant 10 months late (getting to capacity).”
Councilman Bob Fieseler also wanted a closer look at IMEA, noting that the majority of its board members were from downstate Illinois. He said that Naperville has only one member on its 24-person board, but accounts for 35 percent of the consortium’s purchases.
Like Krummen, Fieseler wanted more information on IMEA’s operations. He also isn’t completely sold on the argument that unpredictable weather patterns were a prime cause of price fluctuations.
Fieseler called for an aggressive stance on pricing, suggesting the city offer IMEA 5 percent more, “then we don’t pay the rest,” effectively putting pressure on the consortium.
But Fieseler didn’t agree that the city had done a particularly good job in managing the utility since it opted to join IMEA in 2007.
“We were asleep at the switch,” he said. “We never asserted ourselves enough.”