Winnetka's Coal Contract: Residents May Pay More For Not Going Green

The promise of cheaper energy may leave Winnetka residents actually paying more for power than their green-energy neighbors, clean energy activists say in a new report by the Institute for Energy Economics and Financial Analysis released Wednesday.

Winnetka is currently contracting with the Illinois Municipal Electric Agency, a group that purchases energy from the new coal-fired power plant Prairie State Energy Campus. The cost of power is projected to be higher than municipalities were originally told because the cost to construct the power plant is almost $1 billion more than expected, according to the report.

Rather than paying $41 per megawatt hour as the Midwestern contracted communities were promised, they will be paying closer to $60. That’s if the communities were to receive 100 percent of their electricity from the plant. While Winnetka is contracted to receive only 25 percent its energy from Prairie State, that contract expires in 2035.

On the other end of the spectrum, Kenilworth recently aggregated its energy, locking in some of the in the north shore. Residents and small businesses will pay 4.11 cents per kilowatt-hour for 100 percent renewable energy, while Winnetka's 2012-2013 purchase power rate is 5.47 cents per kilowatt-hour.

Sixty percent of Winnetka’s power is sourced from fossil fuels, while just five percent of the energy is provided by a long-term contract for wind energy generated in Lee and Dekalb counties. While Winnetka is contracted with IMEA, Kenilworth residents are expecting to from September through May 2013 by switching from Commonwealth Edison to a greener aggregated energy source.

"Undoubtedly there’s some component of green, but there isn’t enough wind and solar power to get 100 percent green power.”

However, officials in Winnetka say they remain happy with their investment in Prairie State and are skeptical about the green energy label. According to Village Manager Robert Bahan, although a community considers itself as “100 percent green,” people need to look at the municipality’s power portfolio. In addition, he says a diverse portfolio means more stable energy for consumers.

“The report seems to say we get 100 percent of our power from Prairie state, and it’s really less than 25 percent of our power portfolio,” Bahan said. “About six to seven percent of (Winnetka’s portfolio) is ‘green’ generated… (With Kenilworth), you need to look at the fundamental makeup of their power portfolio in their aggregated contract. Undoubtedly there’s some component of green, but there isn’t enough wind and solar power to get 100 percent green power.”

Both Bahan and Brian Keys, the director of the village’s Water and Electric Department, say ‘green’ communities like Kenilworth use renewable energy certificates, or ways to buy additional, non-renewable energy while keeping the title. In their opinion, a strong, diversified energy portfolio is more important to keep a stable, fairly priced energy source for consumers in Winnetka.

“The Prairie decision may not be perfect, but it’s an attempt to diversify the portfolio so we’re not relying on one source of energy.”

“When you say ‘100 percent renewable energy,’ the technical component would be difficult to achieve,” Keys said. “Some of these communities are doing this, and to achieve this goal would be to receive certificates. … I think we need to look at the Village of Winnetka because, while we purchase all the power from IMEA, Prairie State is just one part of that… Over the long haul, we expect it to be a viable part of the performance portfolio for Winnetka.”

Bahan added that when the idea of including the Prairie State deal was introduced in 2007. In addition, he says he’s certain the coal-fired plant’s prices will fluctuate just like any other energy resource, green or carbon-based.

“The Prairie decision may not be perfect, but it’s an attempt to diversify the portfolio so we’re not relying on one source of energy,” Bahan said. “The rates will change.”

The village is expected to release an official statement regarding the report and Prairie State’s increased prices on Friday.