METROPOLIS, Ill. — The new year will bring an increase in energy costs, not only to city of Metropolis residents but also to those living in Joppa and Brookport.
And the reason, as corporate counsel Rick Abell explained to the Metropolis City Council at its meeting this week, isn’t the electricity itself.
“One of the things going on the electric world is that energy rates have been relatively flat for the last several years. The transmission is where all the cost increases have been coming, and will likely continue for the foreseeable future,” he said. “It affects everybody who Ameren delivers power to. It will be reflected in their retail rates and their wholesale rates.”
Abell said Metropolis pays a delivery service charge in its rate schedule and annually reviews it to determine if it’s sufficient to cover the rates passed on by Ameren.
“In looking at that, the rate in place wasn’t enough to cover the last cost increase,” said Abell, who is a board member of the Illinois Municipal Electric Agency board.
Abell noted that over the last seven years transmission costs have increased by $26.6 million — from $14.9 million in 2014 to $41.5 million in 2021 — with $4.6 million of the increase being from 2020 to 2021.
So to cover the costs IMEA is increasing its delivery service charge by 97 cents per kilowatt month. For Metropolis residents, that translates to a $1.08 increase.
“It’s not huge, but I think the trend line is something we have to think about,” Abell said. “The IMEA will do its best to manage it, but these are costs that are going to be incurred. As transmission providers get purchased to put more money back in the grid, those are going to dip back into the rate base and everybody’s going to pay more.”
Metropolis has been a part of IMEA — the Illinois Municipal Electric Agency — since 1986. The city has a full requirements contract with IMEA that runs through 2035. Metropolis is one of 32 member cities with an agreement to buy all of its electric power from IMEA until that time.
Through those contracts, IMEA finances the power plants and long-term electric supply contracts that it owns. IMEA is a municipal corporation with a board of directors composed of one representative from each member and an executive board composed of four officers and five at-large positions. The board employs staff; approves rates, policies and programs; approves financing; approves short- and long-term contracts; approves capital projects; approves annual budgets, audits and legal actions; oversees an annual budget of $334 million; and manages assets valued at $1.2 billion.
Abell also informed the council that IMEA’s credit rating has been raised from A+ to A++ by Fitch Ratings.
“IMEA has structured to pay off its debt before Prairie State closes, which means after several years of operation where there’s no debt against that plant then IMEA will be able to take advantage of the lower cost of power. Anything they take advantage of, the city of Metropolis takes advantage of,” Abell said.
In other business, the Metropolis Fire Department will be seeking closer assistance for work on its trucks.
The council accepted the city of Paducah’s fleet maintenance motorized equipment and emergency apparatus service agreement for the department.
Metropolis Department of Public Safety Director Harry Masse said he was contacted by the city of Paducah, which has mechanics and technicians who are trained at certified schools to work on firetrucks and other large fleet emergency apparatus. The service is offered at the city of Paducah’s cost to area agencies.
“They will not charge us anything more than what they charge the city of Paducah for their own stuff,” Masse said, noting the equipment currently has to be taken to at least 2.5 hours away to Freeburg or to the metro-area to be worked on. “This is local and these guys are certified — they specialize in emergency equipment”