The News Herald (Willoughby, OH)
Municipal electric aims to lower costs
Painesville Municipal Electric continues to seek ways to provide customers with available and low cost power.
Painesville Municipal Electric continues to seek ways to provide customers with available and low cost power, says Electric Superintendent Jeff McHugh.
With no opposition from Painesville City Council or the public, two resolutions that will help the electric department achieve that goal were passed at the most recent council meeting.
The first authorizes the execution of the 2021-2026 fixed volume energy supply schedule with American Municipal Power, Inc. The fixed volume legislation will replace two power blocks. A power block is a fixed amount of power, that does not change, McHugh said.
“In the present power markets lower cost power blocks are available to complement our project power and the remaining requirements portion of our portfolio,” he explained in a letter to Painesville City Manager Monica Irelan. “This power would replace our present Morgan Stanley blocks, which will end in 2020.”
AMP will negotiate with one or more reputable and financially sound third party power suppliers to enter into an agreement to purchase electric energy in various megawatt or megawatt hour blocks for a term beginning on Jan. 1, 2021 and ending no later than Dec. 31, 2026, all of which will provide an economical source of electric energy, the resolution said.
When the resolution was introduced at the July 16 meeting, McHugh said the old price was $64.68 per megawatt hour and the new is $36 per megawatt hour.
The purchase will come from the electric budget and financing will not be required for the blocks. They would be paid for from customer rates.
A resolution to enter into an agreement for remaining requirements for the power portfolio was also passed. This agreement will be paid for using the purchased power account in the annual budget.
McHugh recommended approval of this resolution because the power markets are favorable for entering into contracts now and this would be a savings for the City when it becomes effective in 2021.