Naperville Council Examines Joint Action Agency as Power Option for Electric Utility

Naperville council explores joint action agency as power provider

The prospect of participating in a joint action agency as a power provider for the Naperville Electric Utility was explored at the city council's Tuesday meeting on May 5.

Utility Director Brian Groth provided a presentation and memo on the ins and outs of joint action agencies during the recent meeting. It is part of a months-long series of reports about different scenarios as future decisions hang in the balance. The reports will continue through the summer.

Earlier this year, the city council voted to pause contract extension talks with the Illinois Municipal Electric Agency beyond 2035 as other possibilities are explored in more detail.

What a joint action agency is and what it could mean to Naperville

A joint action agency is one of multiple power provider possibilities for the Naperville Electric Utility, Groth indicated.

At its most distilled level, Groth defined the structure of a joint action agency as a nonprofit organization of municipally owned electric utilities, pooling finances and load to increase economies of scale.

The granular features of such agencies can vary, but communities participating in such a form of power procurement do so for common reasons.

Through joint action agency memberships, all utilities are able to take advantage of a large utility's load to participate in generation projects or energy purchases not always available to a smaller load, Groth said.

Create new or participate in an existing joint action agency

If the Naperville City Council were to ultimately pursue a different path forward for the electric utility and go the route of a joint action agency, Groth said two specific structural scenarios would be on the table, each with different considerations.

One scenario could entail the city creating its own joint action agency, bringing in other members in the process. Groth pointed to the Northern Illinois Municipal Power Agency as an example. It serves the communities of Batavia, Geneva, and Rochelle.

An important step in the process is to identify other municipalities willing and able to join, to create a joint action agency, Groth said. Agency bylaws will then need to be created, and finally the hiring of employees to staff the agency.

Participating in an existing joint action agency could have less risk, Groth said, since the entity has established roots.

We must first identify an agency and begin negotiating the terms under which we will enter, Groth said. This process likely begins with agency staff and ultimately ends with the board of directors reviewing our requirements and approving our entrance.

Much like the utility's current relationship with IMEA, participating in an existing joint action agency could ultimately mean less autonomy. The organization's bylaws would provide a true picture. But there could be upsides as well through collaboration.

Financial considerations deviate from joint action agency creation, while power supply autonomy lies with the agency and the negotiated terms of membership, Groth said. More specifically, Naperville would benefit from the proven track record of the agency, both from a services delivered and power procurement perspective.

Council weighs in with preliminary thoughts and questions

A number of councilmembers peppered Groth with questions about a joint action agency scenario during the recent presentation.

Big picture, Councilman Benny White said he is hoping for a fleshed-out look at what aspects of a power provider are important to the city, in a general sense, and is hopeful that looming question will be answered when workshops take place later this year.

At quick blush, White commented on the prospect of a joint action agency providing nimbleness to Naperville as future power needs are considered.

One thing that popped for this joint action agency is flexibility, White said. What I'm saying is, as we're looking at a joint action agency, will we have the ability to flex in certain areas, where we somewhat are restricted with IMEA because we've got 30 other members and have to agree on all of these different things.

Groth, in response, said that would be part of the negotiations.

I think a lot of that has to be negotiated into the contract so that all members are clear what our intentions are, Groth said. Those options, much like where we are today with IMEA, could potentially shift costs to other communities.

Mayor Scott Wehrli inquired where Naperville falls, broadly, in the spectrum of joint action agencies, compared to other active participants.

From a size perspective, probably in the middle, Groth said. Probably, from a load perspective, maybe a little bit higher than the middle.

Wehrli also inquired about the practical feasibility of participating in an existing entity.

Given that we haven't gone out and specifically asked if other joint action agencies are interested in having us join, do you have a sense for available opportunities that are out there, Wehrli asked.

I would say there's probably two or three that would match and are like-minded, Groth said, in response.

Residents continue weighing in on power provider options

As has been the case at council meetings in recent months, Naperville residents continued stepping up to the podium, sharing their thoughts on how the city should move forward on deciding power procurement in the future.

John Doyle suggested the city adopt a strategy akin to the public meetings the Naperville Park District held in advance of its successful bond referendum in March in having open dialogue with residents about the weighty issue.

That was a master class in public engagement, and I think we all know that referendum wasn't passing if you didn't have those open houses, Doyle said. I just don't understand why we aren't have those same kinds of engagement activities with decisions that are this large.