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Online Services. ADA Compliance. Thank you. Batavia's relationship with the Prairie State Energy Campus, finalized in , and involving issuance of bonds by the partnership it formed with the Cities of Geneva and Rochelle, has been the topic of much discussion. The costs of the plant, much higher than expected, the ramp up of the plant which has taken longer than expected, and the amount of power the City contracted for have all come together in the perfect electrical storm.
The City's power usage had been on the rise along with the economy, during the period in which the Prairie State project as well as others were looked at by the City, as electric power had been "deregulated" by the State legislature, and no longer could the City enter into "all requirements " contracts. Those contracts require a power provider to furnish as little or great an amount of power as the City needed at any time. The new industry required municipalities which owned their own electric utilities to purchase power in blocks of time, and in amounts which tried to compromise between the price of security of a guarantee of a certain level f power, while affording the freedom to either not pay for contract power it wouldn't use, or to take advantage of the daily market for power.
Electricity had become a commodity much like corn or soybeans, except that since power couldn't be saved, there was actually buying and selling decisions being made based upon the forecast in whether ahead of time.
The blocks of energy were related to the times during which electricity is used in different amounts. There is a 24 x 7 block, known as "base load" which is the power the City believes will be used all day, every day regardless of weather or work day.
Because this is the firmest power to purchase it is the cheapest generally. The next block is 5 x 18, which reflects the increased usage by the City during the work week. This is power over and above the base load, and again the City tries to buy just the right amount. The third block is called "peak power" which is the amount of power the City needs when it exceeds the amount of power it has contracted for in any single day and this can be extremely weather dependent.
For example, on a hot day when we would exceed the amount we have purchased by contract we have to buy in the open market, and if we use more we automatically pay for whatever we used at the then-market price.
If there is a hot day in the entire area, the price shoots up as everyone needs more. If it a cold day, conversely, utilities are trying to sell of their excess power and the prices generally go down.
Prior to deregulation then, the City didn't have to worry and the power suppliers like Exelon then Com Ed or other suppliers assumed the risk of the under or over supply and the consequences. Afterward, the risk shifted to the users, including cities like Batavia. It was because of this change that the actual ownership of power generating plants was seen as being wiser than previously.
Cities had been organizing in power agencies and co-ops across the country for many years, and purchasing such generation as coal-fired plants, hydro-electric facilities dams and back then some gas-fired "peaker plants" which could be turned on when electric priced were at their highest and be run more economically allowing the owner to "shave" some peak.
If they could generate their own, they wouldn't have to go to the market and pay for expensive power, OR in some cases turn it on and sell into a high-priced market. The agencies could manage their generation and enter into contracts as a group, though the market and economy still had to be contended with from time to time. As the communities grew, so did the electric loads, and with deregulation there was even more interest and justification for purchasing generation.
The City of Batavia had been a member of Illinois Municipal Electric Agency, but departed along with Geneva and Rochelle to explore such opportunities. Other coal plants were looked at, wind farms just beginning to gain a little traction and opportunities for hydro as well. Communities with utilities positioned themselves to deal with the changes.
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