City Council - Regular Meeting

Good evening and welcome to the Electric Strategy Workshop. As a reminder, no final actions are being taken at this meeting since it is a workshop. Also, the rules of city council still apply. Speakers are asked to present their comments in a respectful and courteous manner. SPEAKERS SHOULD STAY ON TOPIC AND BE COGNIZANT OF THEIR WORDS. SPEAKERS ARE GIVEN THREE MINUTES TO ADDRESS THE CITY COUNCIL, AND TO HELP SPEAKERS STAY WITHIN THE THREE-MINUTE TIME FRAME, SPEAKERS SHOULD BE AWARE OF THE TIMER LOCATED ON THE SIDE DIAS TO YOUR RIGHT. THIS TIMER WILL BUZZ WHEN IT HITS ZERO, AND WE WILL ALERT T

And if you've heard your name called, please move to the front row.

Thank you. Any more speakers? No, Mayor. All right. I'm going to turn the workshop over to our city manager, Mr. Krieger, for the beginning of his presentation.

Thank you, Mayor. Two questions, Mr. Krieger. On slide three, it caught my eye in that middle one. IMEA begins handling administrative duties, but we weren't getting our power, our energy through them, right?

OK. So when we're talking about our options later in the presentation and the options we've been talking about before, and we're talking about the need for staff or administrative This is essentially what IMEA did for us for several years.

So as a city, we have a history, though, of splitting up the energy procurement with the administrative, if necessary.

Okay, and so just to clarify the ComEd part, so this timeline starts in 2007. Prior to that, we're ComEd customers.

And then my other follow-up was you were talking about the PJM capacity concerns for 2030, 2035. Would where we get our energy from impact whether or not PJM I don't know if brownout's the right term, affected our power supply. So the reliability of the energy Naperville gets from PJM and the grid, is that dependent on whether we're with IMEA, a joint action agency, any of these other options?

Okay. So IMEA wouldn't necessarily cut Naperville's power in 2030 if there were outages to the grid based on where we're sending our money for the power?

All right, council. I've asked Director LaCloche to run the computer for us. She's going to live type any versions that might come out of the council discussion here. And we will have our ideas put down on the computer screen in front of you. We will call first on Councilwoman Jane.

Thank you, Mayor. Thank you, Mr. Krieger, for your presentation thus far over the summer and for offering these examples for vision statements. I agree with the key points delineated on slide 9, which talked about it being long-term focused, aspirational. But I will also add to that that I think it needs to be a statement that's succinct. easy to understand and hopefully measurable through our decision framework and our ultimate mission statement. So for those reasons Councilwoman Gibson and I kind of been thinking a lot about that and looking at the options here, we'd like to offer another po

Okay, Councilwoman Gibson, and note that we're identifying that as number six at this point.

Thank you, Mayor. And thank you, Councilwoman Jane. As she mentioned, we talked about this a lot. And particularly, I appreciated Councilwoman Jane's background coming from District 204 board. As some of you may know, I was on the Park Board previously. And at both of those levels of government, I'd say we really worked a lot on strategic planning and vision and mission. And one of the things I took away from my time at the Park District is that a good vision mission statement is short. You want everybody in the organization to be able to say it at the drop of a hat. At the Park District, it w

THANK YOU, MAYOR. SO, YOU KNOW, MY, AND I DO HAVE A SUGGESTION TO ADD TO THE LIST, You know, my concerns are always slippery slope. What are these words gonna be used for in the future? Are we boxing some future council, some future city manager into financial commitments that may be reckless at the time? And so if the statement is largely symbolic, I don't know how we could have any assurances. Director Peer, you just mentioned that whatever adoption of a vision statement, the next step would be it would cause a change in our mission statement.

As far as words, sustainability is a word that has come up all the time. We don't really get a definition of what that is. If the vision statement's meant to be vague, it causes some concerns. So my suggestion would be to simply Two that are very similar here, but I'll go ahead and start. So to maintain a financially strong, technologically adaptable electric utility, capable of meeting Naperville's future energy needs while preserving flexibility for generations to come. That's it. Thank you.

Okay, anything else, council members? All right, our goal here, Councilman Wilson.

Sorry, Mayor. I don't have an additional statement to add. I guess, I don't know, both seem, the two new ones here seem... pretty succinct, both add flexibility, which to me makes sense with IPA, for example. I think Director Krueger talked about this. It's been talked about before with IPA projecting capacity concerns in 2030. But as I've talked about before, the sustainability bit does, and again, if it does change future statements things that we might be locked into. I do have concerns just because as I've talked about, sustainability means different things to different people. And especia

Thank you. I agree metrics are very important. But to my understanding, Mr. Krieger, that metric and rubric by which we'll assess our future decision making and actions will be based on the decision framework and the mission statement, perhaps, right? that will help us define what each of these values mean, is my understanding between what a vision statement is for versus the decision framework and mission statement.

Yeah, the thinking behind the number six was, first of all, it captures many of the words we've been talking about and using as part of the presentations as the framework or the lens through which we were analyzing all four options. a good vision statement won't just be symbolic, but that it's really those next steps that are critical, that where we delineate and operationalize and make these terms more concrete, and then we live up to that. It's our job up here in our community to make sure that those words mean something and not to give just lip service. I THINK THAT IS TOTALLY POSSIBLE. I T

COUNCILMAN WHITE. THANK YOU. I guess we're looking at something that's more aspirational. a little concerned. For some reason, a couple of my colleagues are concerned about specifically the word sustainability and what it means and if it's locking us into something. I mean, I could take a look at almost any one of these and say something similar. I mean, what is technologically adaptable? I mean, okay, it sounds great too, but that can mean a lot of different things as well. So I think it's going to, IT'S IMPORTANT AT THIS STAGE TO NOT FEEL LIKE WE'RE LOCKING SOMETHING IN. WE HAVEN'T PUT ANY M

Thank you, Mayor. I just wanted to give a shout out to Mr. Stark, who probably for the last two years has been talking about the importance of having a vision statement. I appreciate Councilwoman Jane's comments. I will be supporting number six as the version of this. I, in particular, like that there's five pillars. That makes it very easy, I think, to build a mission statement later on and operationalize. But just as a general comment, I think, beyond just the energy discussion. As we think about strategic planning for our city in the next couple of years, it's been a long time since we've h

Thank you. One thing I'm looking at here throughout all of these different vision statements is the use of the word affordable. I kind of interchange that with competitiveness as well. Let's face it, there's a lot of communities around us that we are hearing hearings on their water supply and how the privatization of their water supply has driven the costs up TO MAKE IT ALMOST UNAFFORDABLE TO LIVE IN THEIR COMMUNITIES BASED UPON WHAT THAT PRIVATE WATER SUPPLY COSTS. SO I DO THINK WE HAVE TO UNDERSTAND THAT IN THE BUSINESS OF SELLING ELECTRICITY, WE HAVE TO BE COMPETITIVE AGAINST WHAT THOSE COM

I would be interested in hearing what my colleagues think of that move. I have reason in the order that I placed it in. I do think when you think about utility, reliability, and affordability are oftentimes the cornerstone values associated with it. But I do find the order to be perhaps reflect what I think interconnectedly. I do think, though, sometimes by putting sustainability towards the end, we think of that as an afterthought. That could be a perception, although that's not necessarily the case here. So I would love to hear from others on the dais on what they think about that.

Yeah, my position is we have to have customers. And you can't sell a product without customers. And you have to have an affordable product for those customers to buy. Councilman Holzer.

Thank you, Mayor. Actually, I think the Mayor's point is exactly why I'm going to support number six. I mean, I think Councilman Jane was very clear that the intent is not for one of these to stand out as a priority. I understand the Mayor's argument, but I think the Mayor's argument essentially is we are setting aside and agreeing to set aside affordability over the other four. And I think that overlooks some of the interconnectedness part of this. So if we lack flexibility and local control, as an example, we lack the ability, even under a current contract, we lack the ability to purchase sy

THANK YOU, MAYOR. I AGREE. I'M GOING TO ECHO COUNCILMAN HOLZHAUER'S comments, affordability, obviously essential to bringing businesses, also reliability. And I think maybe even the tension between those two, if we have really cheap energy but it's not reliable, that's just as likely to drive away businesses and residents and people that want to be in Naperville. So personally, when I look at vision statements like this, I see five pillars. I don't see any hierarchy in the way they're ordered. I think moving it around and explicitly saying we're putting them in hierarchy, I think they work tog

Thank you, Mayor. Councilman White makes a good point. You can take all these words, technology, you can extrapolate that into what could that mean in the future? Thank you. And my concern is, where does the cost come in? Like, what are we committing to? And so it's pretty simple to me, reliability and affordability. I mean, that's really what's important to people. And sustainability, quite frankly, it's a code word. And I'm concerned that no one is able to define it for me. And if we put it into a mission statement, it's not something that are just words. It's flexible. It's something we asp

OKAY. SO IT SOUNDS LIKE WE'VE GOT THREE VERSIONS THAT WERE OFFERED UP FROM CITY COUNCIL. WE'VE GOT TO IDENTIFY ONE FROM THIS GROUP. AND WE'LL DO A STRAW POLL TO DETERMINE what that looks like. So we'll straw poll number six.

Okay. And that's simple majority. That's correct. We'll test number seven and number eight. Okay, number six it is. Next item.

OKAY. WE HAVE SOME QUESTIONS STARTING WITH COUNCILMAN HOLZER. THANK YOU, MAYOR.

So make this easy. As far as the decision point, I actually 100% agree with Director Krieger's recommendation of what the focus point should be. So if there's a call for hands in the air later, I will support that recommendation from staff as is. I did have a couple of points I wanted to highlight. If we could jump to slide 14. All right. And Mr. Krieger, you used the language verbally, which I really appreciated, but I just wanted to highlight, you know, the bottom point says custom programs. That's going to be updated to something like flexibility. And while it says on the screen that we're

THANK YOU, MAYOR. JUST SO, JUST TO BE CLEAR, YOUR RECOMMENDATION IS WE DON'T FOCUS ON TWO AND FOUR, ALL RIGHT?

Okay, so find an existing joint action agency. And remind me, when we talked about the timeline, option one was a like a next year decision, like a June? FORMING OUR OWN JOINT ACTION AGENCY?

OKAY. THANK YOU. AND SO MY UNDERSTANDING IS, KIND OF PUSHING THIS DECISION OFF, AGAIN, WE'RE WAITING FOR A RATE STUDY THAT'LL COME IN JUNE OF NEXT YEAR. AND THAT'LL GIVE US SOME DATA. AND THAT OPTION THREE, OR MARKET PARTICIPATE, OPTION TWO, THREE TOGETHER, WHATEVER, That's going to involve planning for upfront cash and a rate stabilization fund. And is that what we're waiting on? We're waiting to see what impact that investment would have when we would have to voluntarily raise our own?

Okay, just to be even more clear, so the rate study that we get back in June of next year is going to forecast what? we may have to pay in 2028 in increased rates if we were to pursue market with or without asset generation. Okay. Last question, as far as market participation with asset ownership, this would be purchasing something. Do we have any idea, like costs, and would that be small, modular, nuclear, or what would that be?

And then just one last comment, Mayor, if I can. So... All right, so timeline, June, rate study. I'm losing my train of thought here. I had a point. Oh, so we've gone through all these options, and some of them have attractive features. They all have risk. Some of them kind of frightening risk to me and uncertainties, but I'm having an open mind and We're going to delay more, and we're going to look, I guess, look for a recommendation from you guys after we narrow it down for you. But IMEA, I don't even know if they're interested in us being a partner. I mean, I don't know. And we got a letter

Thank you, Mayor. Yeah, a couple of things. I guess to, you know, I guess this ties into the slide 14 when we looked at the vision statement and then, you know, looking at our decision framework where, again, like we just talked about sustainability on the first bullet point. Obviously, there could be more that fall into this would be reduction of greenhouse gases. Obviously, this is just one. To me, these things may end up, the vision may end up conflicting where you look at this, and I'm sure there are some people here in the audience that might like this and might not. But when I see this,

Yeah, thank you, Mayor. Just a few points for clarification. First of all, I appreciate us moving from eliminate to focus on the options. I think that's reflective of where many of us are, what we're thinking. I have a little bit of confusion between option two and three in making a decision about focusing our efforts. I guess I want clarification on what we mean by focusing. So let's say we voted that, let's say theoretically we voted for option three and one to be the focus. What does that mean for next steps for staff?

So from a staff bandwidth perspective, do you think there's a lot more involved with exploring option two with option three? And part two to that question is, is that exploration or focus being done between now and the rate study or post-rate study publication or reporting?

And last question. So between now and June, do you foresee us working on the decision framework and the mission statement in preparation for that exercise when it comes time?

Thank you. I think what I had to say largely, Mayor, is what Councilwoman Jane just said. I'm concerned that the next step slide, 22, says direct staffed further research. And I feel like there's some really big steps in the middle of the decision framework. While I recognize that there's bullets in this presentation, I think the next step is that we need to talk about the decision framework as a council. Because coming up with the five pillars tonight even highlighted that we all have different understandings of each of those pillars. So I just want to make sure that we aren't just taking the

OKAY, GREAT. THANK YOU. AND TO THAT POINT, YOU KNOW, FOR THE FOUR OPTIONS, YES. The only one I would be comfortable eliminating now is the sale of electric utility because that seems like a no-brainer. It's the opposite of local control and flexibility. For the other three, I hear your points about asset ownership without asset ownership, but I'm not comfortable eliminating any of those until we've, as a council, come to a consensus on the decision framework.

And just for my thinking going forward, because these options, we would have more control and flexibility on it. THE OPTION WE CHOOSE EVEN INITIALLY IN 2035 COULD BE DIFFERENT FROM THE OPTION WE CHOOSE IN 2040, 2045, 2050, CORRECT?

COUNCILMAN HOLZER, SECOND ROUND. THANK YOU, MAYOR. AND JUST FOLLOWING UP ON THAT POINT, I JUST WANTED TO GIVE A SHOUT OUT TO MR. GROTH AND WITH HIS RECOVERY I HOPE HE'S DOING WELL. HE'S DONE A WONDERFUL JOB LEADING HIS TEAM. AND ALSO THE FACT THAT WE ARE FOCUSING ON OPTIONS ONE AND THREE I THINK IS A TESTAMENT TO THE ELECTRIC DEPARTMENT AND THE FAITH WE HAVE IN OUR EMPLOYEES THAT THAT OPTION ISN'T WHAT WE'RE FOCUSING ON. I JUST WANT TO MAKE SURE THAT IF THEY'RE OUT THERE LISTENING, THEY KNOW THAT WE UP HERE APPRECIATE EVERYTHING THE DEPARTMENT DOES EVERY DAY AND WHAT AN AMAZING COMMUNITY WE HA

THANK YOU. JUST A FEW POINTS. THE IMEA, I MEAN, WE HAVEN'T HEARD FROM THEM, WAS STATED UP HERE, BUT I WAS KIND OF WONDERING THAT MYSELF. I MEAN, WE HAVE AN OPEN MEETINGS FORMAT, A PUBLIC where they could come up and speak if they'd like. So for public comment, as a minimum, if not just a formal invitation. So I never have taken that off the board. I'd like to hear what they have to say. Anyway, also affordability. I know, I think the metric you're looking at is comparing it to ComEd, and maybe that's just an example of what we can compare it to. It'd probably be the main one I get, but maybe o

And I'll go back to sustainability being part of the mission. I mean, I guess we need to look at CEJA. We've been required. to get off of fossil fuels. I think sustainability, from that standpoint, should definitely be in there. We need to maybe put some parameters around and define what we're looking at. But the greenhouse piece of this is not even our call. We've been told that we have to do that. So unless something changes, but as of now, that's what we're living with. The other thing I would ask about with option two and three I see some advantages of option two, but owning an asset that

Thank you, Mayor. Thank you to staff. Good presentation tonight and good discussion up here. I think it seems like we're in a positive direction, I think, moving forward. Just one quick question on the four options. I appreciate the pivot. It sounds like we're talking more about focusing than eliminating, but I've heard a little bit mixed on lack of focus or eliminate on option four. Do you say hello to the electric utility? It seems like, I don't think I've heard anybody say we want to leave that on the table, and I just want clarity, I guess, from staff. Are we, is that remaining in, are all

Mr. Krieger, on option number two, the asset ownership piece, are you including the BEZ under asset ownership, or would that be a potential option in three, since the BEZ technically is not a generator, per se, of electricity? Is that...

And when it comes to asset ownership, you either have to find a site for the asset that's going to be the generator of power in your city or find a place outside of your city. So Naperville could potentially... be investing in wind, solar, nuclear, gas-fired generation? I mean, there's only so many options out there. But if you can't host enough generation in your city, you have to buy it someplace else. Is that your understanding?

All right, council. The goal here is to try to, give our professional staff some sort of guidance on what they should be focused on. I think the easiest way to run this is take the affirmative position, and I'm gonna be going option by option, and we're looking for a simple show of hands in the air. majority simple majority will drive that particular option as a viable option that the city should continue to pursue and if there's not a simple majority on an option then that will be guidance to not pursue so we'll start with option one hands in the air in support of option one option two

OK. I believe that's all the questions we've been asked to answer tonight.

Thank you for all of your preparation, to all the speakers who came forward tonight, to the city council for all your participation tonight. I thought it was a very fruitful and productive discussion. With that, our workshop has ended.