Municipal utilities exist to provide reliable service to city residents at affordable rates. A Staff memo presented to the City Council on November 4, 2019 supported a 20-year contract at $4.5 million a year for a “utility scale” solar generation resource. Part of the rationale was that this contract could help the City meet the greenhouse gas emission reduction targets in the climate change plan that the City Council recently decided to adopt. The City would plan to resell most of the energy it obtains under the contract in the wholesale market to offset its cost. Here is the specific language in the Staff memo:
Our current renewable rate impact methodology is an incremental cost impact model which works with the assumption that renewable generation provides needed capacity, does not exceed current load and can be absorbed by the existing dispatchable resources. When the level of renewable resources has the potential to operate outside of these assumptions, additional impact assessments should be considered. It is important to know that at some point we would be producing more energy relative to our load, depending upon the reconciliation interval considered (i.e. hourly, daily or monthly). As renewable resources are added we will reach a point where the energy produced from our resources exceeds Columbia’s load. This excess generated energy will be settled directly in the MISO energy market.
In other words, we will be buying more power than we need for providing electric service to users in Columbia. This appears to be a shift away from a focus on what is needed to provide electric service. The Water and Light Advisory Board is also considering how to advance climate change goals in the integrated resource plan for the electric utility by procuring renewable resources, and it is not clear that they are giving equal consideration to more traditional approaches.
The purchase of renewable resources to meet goals other than the provision of service can be very costly for those who pay the rates for utility service, as this cautionary story shows. Citizens deserve clear and easily accessible information on the options being considered. Only when all appropriate options, including purchased power and other traditional resources are evaluated for cost and reliability and risk can we properly weight the trade-offs and decide what best meets the need for efficient, reliable and cost-effective electric service. We are not getting this kind of information.
Ask questions and be vigilant. It’s your utility and you pay the costs.
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