ACTION REQUESTED:
Title
Communication from the City Manager with a Request to ADOPT an ORDINANCE Amending the City of Peoria 2022-2023 BIENNIAL BUDGET to Include $45,000.00 for a MAILING to Municipal Aggregation Customers.
Body
BACKGROUND: On April 14, Midcontinent Independent System Operator (MISO) held the Midwest capacity auction and the results were unexpectedly high. During the last auction, rates were $5.00/MW-day. Capacity is the component of power rates that provides payments to generators to maintain operations for grid reliability. At the auction, the region that covers the Ameren part of Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Montana, North Dakota, South Dakota and Wisconsin ended at $236.66/MW-day. The other zones in the auction included Arkansas, Louisiana, Mississippi and Texas ended at $2.88/MW-day. Utilities that entered the MISO auction without enough owned or contracted capacity to cover their requirement (load plus reserves) will pay these prices for the amount of capacity they are 'short'. The cost impact to consumers of those utility with a shortfall will depend on the amount they are short and the utility's retail rate arrangement with their state regulator. Utilities that entered the auction with sufficient capacity to cover their requirement will not need to purchase capacity at these prices.
The soaring capacity auction prices signal a shortfall of generation reserves across the entire Midwest region. This affects all parties in the energy space, including Ameren's utility default rates and aggregation contract prices. MISO stated that Illinois is one of 11 states where there is not enough owned or contracted capacity by local electricity generators, and therefore these areas will pay increased prices for limited supply. One reason cited for the shortfall is that as fossil fuel plants are phased out, renewable energy sources, while increasing, have not come online fast enough to replace the lost capa...
Click here for full text