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Special board meeting minutes from Nov. 24
Editor’s Note: Below are the minutes of a special Riverton Village Board meeting conducted Nov. 24 about a new electrical provider. Only stylistic changes have been made
to the minutes, which were approved at the Dec. 1 regular meeting.
The President and the Board of Trustees of the Village of Riverton held a special board meeting Nov. 24 at the Riverton Village Hall, Riverton, IL. The meeting was called to
order at 7 p.m. Those answering roll call: Mayor Rusciolelli; Clerk Blissett; Trustees: J. Rader, Black, Faires, T. Rader, Pottier and Bartley. Also present was Supt. Stone and
Off. Mgr. Viola. Guests included Bob Childers and Troy Fodor of IMEA.
Trustee Pottier explained that Mr. Bob Childers and Troy Fodor were here to discuss purchasing electricity from IMEA when our contract expires next year. He stated that
IMEA’s contract will run until 2035. The other two, AMEREN and CWLP, will only be for 1-3 years. Mr. Childers explained that they are offering us a contract that will go until
2035. He gave the Board copies that explained what the IMEA is, how they were created and what they do. They also explained about the provisions that IMEA wants for
Riverton, if we join them. He stated that that they feel a cost-based deal is better then a market-based. He thinks that in the long run, it will save us money. He explained that
they have to sell bonds to give these deals and that is the reason of the long-term contract. He also showed a list of municipalities that have already joined. He went on to
discuss the plants that they have now and the construction that they have going on, and how much megawatts they will have. He explained that the peak demand should be
around 1100 mega-watts. With reserves, that should bring them to 1250 mega-watts capacity requirement by 2012. That should bring the revenues up to around $280 million
in 2012. He went on to explain the average costs that they have had. He discussed resource diversity. He stated that they are also looking at renewable energy sources, such
as wind and biomass. He stated that the members pay rates based on the costs of all these resources: 49 percent is member-owned resources, 31 percent is long-term
cost-based contracts and 20 percent is short-term market purchases. By 2012, they expect 56 percent member-owned, 19 percent long-term contracts and 25 percent short-
term market purchases or IMEA-owned peaking.
Mr. Childers went over the long-term proposal. Trustee Pottier asked if some of the others that are joining are paying the same. Yes. Mr. Fodor explained what the costs
were and how they run. Mr. Childers explained that the premium would go away after 2025.
Mr. Childers discussed the assumptions. He also explained that if you are a nonmember, you could pay a higher rate. He went over the rates, how they are set, how the
charges for services are set and that they are made by its Board of Directors. He explained about the current rate components for participating members.
Mr. Childers went over the projected average costs. Trustee Pottier had a question about a demand charge instead of an energy charge. Mr. Childers stated that he thinks it
was still calculated right. He wasn’t sure why it showed it that way.
All of this is listed in the copy that is attached to these minutes (Editor’s Note: That was not included in the minutes received by the paper).
Trustee Pottier also discussed the time frame in this decision process. He stated that we weren’t given very much time to decide on whether to do this. We only had a few
weeks until we could make up our minds about going with IMEA. Mr. Childers explained that they needed an answer by their board meeting on the third of December. He
explained that there are a lot of requirements for planning to get ready for April 1. He stated that they need to tell MISO whether we are coming in or not by Dec. 3.
Trustee J. Rader asked about metering cost. Mr. Childers stated that it is the agency’s cost.
Trustee J. Rader asked if we can check it. Yes, we can go over the bill. If you have questions, you can have the meter tested.
Trustee T. Rader asked about their voting methods for the members. Mr. Childers explained that the first vote taken is one person, one vote. Then if there is a house vote, it
has to be because five people voted against the proposal. Then they do go to the mega-watts and calculate them to see if the majority of the mega-watts can carry the vote.
Mr. Fodor explained that they just had a no vote concerning bringing a co-op in and they had to go to the mega-watt vote. He explained how the vote worked. He stated that the
vote has to pass both ways – the one man, one vote and the mega-watt vote. That way, the small communities can’t force anything on the big communities, but it also works
the other way: big communities can’t force anything on the little communities.
Trustee T. Rader discussed a tax that could come out in a couple of years on emission control. Mr. Childers explained that there could be some carbon legislation in the
future. He is not sure when it could come in. It will affect their cost, but the market will go up as well. He stated that some proposals that we might get, could only be for 1-3
years because of the uncertainty of the carbon costs.
Trustee Pottier stated that one proposal that we have is a fixed rate in the next three years. He feels that we would be protected by that for the three years. Mr. Childers stated
that he doesn’t feel that the carbon costs regulations will be put into the rates in the next three years. A plan could be passed and then they might give the utilities a few years
to get ready for it. He feels that they might not start until 2012. Mr. Fodor stated that if we have a fixed cost proposal, we need to have our lawyer look it over. A “change of law”
like the carbon tax, could change that proposal.
Trustee Faires asked what would happen if we decide down the line, that we aren’t getting the savings that we anticipated and we want out. Mr. Childers stated that there isn’
t a provision to buyout of IMEA’s contract. They have made promises to their bond lenders that they can make the bonds, so they don’t allow members to buy out of their
contracts.
Off. Mgr. Viola asked if our rates would change yearly when they are reviewed. Mr. Childers explained that the base rate could change. He stated that they are on a cost-
based rate. If there is a cost that IMEA accrues, it will be supported by their rates.
Trustee Pottier asked about the difference in market-based as to cost-based. He explained that market base includes profit and cost-based is only based on cost. Their
debt is tax-exempt. They don’t pay tax. Trustee Pottier asked if we have any kind of protection by going with IMEA. Mr. Childers explained that if they did lose a unit for a long
period of time and they were forced to go to a higher cost, they would pass the rate on to their members. Mr. Fodor stated that is where their size helps them. Mr. Childers
explained that there are several areas that would have to come into play for them to pass the cost on.
Trustee Pottier stated that the rates between the three bidders for electricity are all in the same area. What can IMEA say that would cause us to want to go with them? Mr.
Childers stated that with the other bidders, they are only for a 1, 2 or 3-year contract. After these years, and your contract is up, you will be at the mercy of the market prices.
Time has shown that the market is just going to go up. Prices are higher then they were five years ago. Chances are, they will be higher in one, or a few years later. Because
of IMEA cost-based rates, you could see a bigger spread down the line, when you would come off one of the other contracts, especially if the market keeps climbing. Mr.
Childers stated that they can’t guarantee that they could offer this proposal after we accepted a different contract and then it expired.
Trustee Pottier asked if we could try and do our own bidding with MISO. Mr. Childers stated that he doesn’t understand why we would want to do our own bidding. We would
need someone very knowledgeable in how the bidding works. We would need someone 24/7 monitoring it at all times. There are several more areas that we would need to
follow. They have someone 24/7 taking care of this. Plus they are very qualified to handle this. There are several factors that go into watching the bidding. Mr. Childers stated
that no matter what, he would consider it a great risk if we decided to do it ourselves.
The Board took a break at 7:43 p.m. and reconvened at 7:50 p.m. The Board then went into closed session at 7:50 p.m. with a motion by Trustee T. Rader and a second by
Trustee Faires. This meeting is closed pursuant to Chapter102, paragraph 42, of the Illinois Revised Statues of the Open Meeting Act regarding contract negotiations for the
purchase of electricity.
The Board went back into open session at 8:30 p.m. with a motion by Trustee Bartley and a second by Trustee T. Rader.
Trustee Bartley asked about the cost to the Village. Mr. Childers stated that if you are a purchasing member, there is no charge. Trustee Bartley also discussed what would
happen if the country goes more green and what impact will this have on our agreement.
Mr. Childers stated that they do have a consultant to look over these issues. He has heard that it will be recommended that we go with a five percent renewable resource by
2010. Around 16 megawatts would be green. They are also looking at biomass. He stated that he is not sure what will be in this strategic plan at this point. He stated that it
could go as high as 20 percent. If there was a federal mandate that states it, then they would work to comply with it. He stated that they are trying to get out in front now by a
little bit with some green usage in other buildings also. He stated that it will probably impact everyone. It would then be worked in the price, which will affect everyone. Trustee
Bartley asked about us getting in IMEA at this time. Mr. Childers stated that he doesn’t feel there would be a problem with us getting voted in, but there is another thing that
has to be done before we can get in. Mr. Fodor stated that he has the paperwork ready and he doesn’t feel there would be a problem.
Trustee Pottier asked about solar energy. Mr. Childers stated that he feels that most of that is handled by the retail suppliers.
Trustee Bartley asked what would happen if we did hold off with going with IMEA now and waited a year or two. Mr. Childers stated that he is not sure. He couldn’t say
whether the members would have a problem or not. He stated that it is a chance we would be taking. He stated that probably if we went to them later, it would be because the
market isn’t any better, and then our premium would be higher.
Trustee Pottier did wonder about the rush to get in and how long other municipalities had before they joined. Mr. Childers stated that we did come to them very late. He
stated that Naperville has taken a very hard look at them. Another came to them and stated that they wanted to go with IMEA. They had a couple of months to look them over.
Mr. Childers stated that it is what you believe. He feels that cost-based is better than market-based.
Trustee Pottier stated that the hardest thing to overcome is the long-term agreement. He is concerned about the changes that could come within the next few years.
Mr. Childers stated that Riverton will probably still be in business for the next 25 years, so we will still need a supplier of energy for those years. If we go with them, it will be
cost-based resources. He feels that supply and demand tells them that the rates will probably go up. That would raise the market-based price. Mr. Childers stated that it
comes down to cost-based versus market-based. They have several municipalities that are with them. They also believe that cost-based is the best way.
There was a discussion on what would happen if coal became obsolete. Mr. Childers stated that the United States has the most of coal and he can’t see that happening.
Things might be set up for cleaner coal. The new plants that they are putting in are 15 percent more energy-efficient. He doesn’t feel that they could say coal couldn’t be an
energy source.
Mr. Childers stated that they have their coal, prepaid bonds for 30 years and that will keep the rate down quite a bit.
The Board went over some rates figures with Mr. Childers.
Trustee Pottier made a motion to adjourn at 9 p.m.. It was seconded by Trustee T. Rader. All agreed.
Editor’s Note: Below are the minutes of a special Riverton Village Board meeting conducted Nov. 24 about a new electrical provider. Only stylistic changes have been made
to the minutes, which were approved at the Dec. 1 regular meeting.
The President and the Board of Trustees of the Village of Riverton held a special board meeting Nov. 24 at the Riverton Village Hall, Riverton, IL. The meeting was called to
order at 7 p.m. Those answering roll call: Mayor Rusciolelli; Clerk Blissett; Trustees: J. Rader, Black, Faires, T. Rader, Pottier and Bartley. Also present was Supt. Stone and
Off. Mgr. Viola. Guests included Bob Childers and Troy Fodor of IMEA.
Trustee Pottier explained that Mr. Bob Childers and Troy Fodor were here to discuss purchasing electricity from IMEA when our contract expires next year. He stated that
IMEA’s contract will run until 2035. The other two, AMEREN and CWLP, will only be for 1-3 years. Mr. Childers explained that they are offering us a contract that will go until
2035. He gave the Board copies that explained what the IMEA is, how they were created and what they do. They also explained about the provisions that IMEA wants for
Riverton, if we join them. He stated that that they feel a cost-based deal is better then a market-based. He thinks that in the long run, it will save us money. He explained that
they have to sell bonds to give these deals and that is the reason of the long-term contract. He also showed a list of municipalities that have already joined. He went on to
discuss the plants that they have now and the construction that they have going on, and how much megawatts they will have. He explained that the peak demand should be
around 1100 mega-watts. With reserves, that should bring them to 1250 mega-watts capacity requirement by 2012. That should bring the revenues up to around $280 million
in 2012. He went on to explain the average costs that they have had. He discussed resource diversity. He stated that they are also looking at renewable energy sources, such
as wind and biomass. He stated that the members pay rates based on the costs of all these resources: 49 percent is member-owned resources, 31 percent is long-term
cost-based contracts and 20 percent is short-term market purchases. By 2012, they expect 56 percent member-owned, 19 percent long-term contracts and 25 percent short-
term market purchases or IMEA-owned peaking.
Mr. Childers went over the long-term proposal. Trustee Pottier asked if some of the others that are joining are paying the same. Yes. Mr. Fodor explained what the costs
were and how they run. Mr. Childers explained that the premium would go away after 2025.
Mr. Childers discussed the assumptions. He also explained that if you are a nonmember, you could pay a higher rate. He went over the rates, how they are set, how the
charges for services are set and that they are made by its Board of Directors. He explained about the current rate components for participating members.
Mr. Childers went over the projected average costs. Trustee Pottier had a question about a demand charge instead of an energy charge. Mr. Childers stated that he thinks it
was still calculated right. He wasn’t sure why it showed it that way.
All of this is listed in the copy that is attached to these minutes (Editor’s Note: That was not included in the minutes received by the paper).
Trustee Pottier also discussed the time frame in this decision process. He stated that we weren’t given very much time to decide on whether to do this. We only had a few
weeks until we could make up our minds about going with IMEA. Mr. Childers explained that they needed an answer by their board meeting on the third of December. He
explained that there are a lot of requirements for planning to get ready for April 1. He stated that they need to tell MISO whether we are coming in or not by Dec. 3.
Trustee J. Rader asked about metering cost. Mr. Childers stated that it is the agency’s cost.
Trustee J. Rader asked if we can check it. Yes, we can go over the bill. If you have questions, you can have the meter tested.
Trustee T. Rader asked about their voting methods for the members. Mr. Childers explained that the first vote taken is one person, one vote. Then if there is a house vote, it
has to be because five people voted against the proposal. Then they do go to the mega-watts and calculate them to see if the majority of the mega-watts can carry the vote.
Mr. Fodor explained that they just had a no vote concerning bringing a co-op in and they had to go to the mega-watt vote. He explained how the vote worked. He stated that the
vote has to pass both ways – the one man, one vote and the mega-watt vote. That way, the small communities can’t force anything on the big communities, but it also works
the other way: big communities can’t force anything on the little communities.
Trustee T. Rader discussed a tax that could come out in a couple of years on emission control. Mr. Childers explained that there could be some carbon legislation in the
future. He is not sure when it could come in. It will affect their cost, but the market will go up as well. He stated that some proposals that we might get, could only be for 1-3
years because of the uncertainty of the carbon costs.
Trustee Pottier stated that one proposal that we have is a fixed rate in the next three years. He feels that we would be protected by that for the three years. Mr. Childers stated
that he doesn’t feel that the carbon costs regulations will be put into the rates in the next three years. A plan could be passed and then they might give the utilities a few years
to get ready for it. He feels that they might not start until 2012. Mr. Fodor stated that if we have a fixed cost proposal, we need to have our lawyer look it over. A “change of law”
like the carbon tax, could change that proposal.
Trustee Faires asked what would happen if we decide down the line, that we aren’t getting the savings that we anticipated and we want out. Mr. Childers stated that there isn’
t a provision to buyout of IMEA’s contract. They have made promises to their bond lenders that they can make the bonds, so they don’t allow members to buy out of their
contracts.
Off. Mgr. Viola asked if our rates would change yearly when they are reviewed. Mr. Childers explained that the base rate could change. He stated that they are on a cost-
based rate. If there is a cost that IMEA accrues, it will be supported by their rates.
Trustee Pottier asked about the difference in market-based as to cost-based. He explained that market base includes profit and cost-based is only based on cost. Their
debt is tax-exempt. They don’t pay tax. Trustee Pottier asked if we have any kind of protection by going with IMEA. Mr. Childers explained that if they did lose a unit for a long
period of time and they were forced to go to a higher cost, they would pass the rate on to their members. Mr. Fodor stated that is where their size helps them. Mr. Childers
explained that there are several areas that would have to come into play for them to pass the cost on.
Trustee Pottier stated that the rates between the three bidders for electricity are all in the same area. What can IMEA say that would cause us to want to go with them? Mr.
Childers stated that with the other bidders, they are only for a 1, 2 or 3-year contract. After these years, and your contract is up, you will be at the mercy of the market prices.
Time has shown that the market is just going to go up. Prices are higher then they were five years ago. Chances are, they will be higher in one, or a few years later. Because
of IMEA cost-based rates, you could see a bigger spread down the line, when you would come off one of the other contracts, especially if the market keeps climbing. Mr.
Childers stated that they can’t guarantee that they could offer this proposal after we accepted a different contract and then it expired.
Trustee Pottier asked if we could try and do our own bidding with MISO. Mr. Childers stated that he doesn’t understand why we would want to do our own bidding. We would
need someone very knowledgeable in how the bidding works. We would need someone 24/7 monitoring it at all times. There are several more areas that we would need to
follow. They have someone 24/7 taking care of this. Plus they are very qualified to handle this. There are several factors that go into watching the bidding. Mr. Childers stated
that no matter what, he would consider it a great risk if we decided to do it ourselves.
The Board took a break at 7:43 p.m. and reconvened at 7:50 p.m. The Board then went into closed session at 7:50 p.m. with a motion by Trustee T. Rader and a second by
Trustee Faires. This meeting is closed pursuant to Chapter102, paragraph 42, of the Illinois Revised Statues of the Open Meeting Act regarding contract negotiations for the
purchase of electricity.
The Board went back into open session at 8:30 p.m. with a motion by Trustee Bartley and a second by Trustee T. Rader.
Trustee Bartley asked about the cost to the Village. Mr. Childers stated that if you are a purchasing member, there is no charge. Trustee Bartley also discussed what would
happen if the country goes more green and what impact will this have on our agreement.
Mr. Childers stated that they do have a consultant to look over these issues. He has heard that it will be recommended that we go with a five percent renewable resource by
2010. Around 16 megawatts would be green. They are also looking at biomass. He stated that he is not sure what will be in this strategic plan at this point. He stated that it
could go as high as 20 percent. If there was a federal mandate that states it, then they would work to comply with it. He stated that they are trying to get out in front now by a
little bit with some green usage in other buildings also. He stated that it will probably impact everyone. It would then be worked in the price, which will affect everyone. Trustee
Bartley asked about us getting in IMEA at this time. Mr. Childers stated that he doesn’t feel there would be a problem with us getting voted in, but there is another thing that
has to be done before we can get in. Mr. Fodor stated that he has the paperwork ready and he doesn’t feel there would be a problem.
Trustee Pottier asked about solar energy. Mr. Childers stated that he feels that most of that is handled by the retail suppliers.
Trustee Bartley asked what would happen if we did hold off with going with IMEA now and waited a year or two. Mr. Childers stated that he is not sure. He couldn’t say
whether the members would have a problem or not. He stated that it is a chance we would be taking. He stated that probably if we went to them later, it would be because the
market isn’t any better, and then our premium would be higher.
Trustee Pottier did wonder about the rush to get in and how long other municipalities had before they joined. Mr. Childers stated that we did come to them very late. He
stated that Naperville has taken a very hard look at them. Another came to them and stated that they wanted to go with IMEA. They had a couple of months to look them over.
Mr. Childers stated that it is what you believe. He feels that cost-based is better than market-based.
Trustee Pottier stated that the hardest thing to overcome is the long-term agreement. He is concerned about the changes that could come within the next few years.
Mr. Childers stated that Riverton will probably still be in business for the next 25 years, so we will still need a supplier of energy for those years. If we go with them, it will be
cost-based resources. He feels that supply and demand tells them that the rates will probably go up. That would raise the market-based price. Mr. Childers stated that it
comes down to cost-based versus market-based. They have several municipalities that are with them. They also believe that cost-based is the best way.
There was a discussion on what would happen if coal became obsolete. Mr. Childers stated that the United States has the most of coal and he can’t see that happening.
Things might be set up for cleaner coal. The new plants that they are putting in are 15 percent more energy-efficient. He doesn’t feel that they could say coal couldn’t be an
energy source.
Mr. Childers stated that they have their coal, prepaid bonds for 30 years and that will keep the rate down quite a bit.
The Board went over some rates figures with Mr. Childers.
Trustee Pottier made a motion to adjourn at 9 p.m.. It was seconded by Trustee T. Rader. All agreed.
Issue Date: Dec. 4, 2008
