In a recent interview with APPA, Doug Brown, the new President and CEO of the Illinois Municipal Electric Agency, discusses the steps that IMEA has taken to receive top-tier ratings from the major credit rating agencies.
He also details the development of a Request for Proposal to be issued to the joint action agency’s member municipal utilities to apply to host pilot battery energy storage system projects in their communities and noted that his priorities include giving IMEA member utilities the tools they need to inform elected officials and the public of the benefits of public power.
Along with his role at IMEA, Brown is also President and CEO of the Illinois Municipal Utilities Association and the Illinois Public Energy Agency.
Brown succeeded Kevin Gaden, who led IMEA for 14 years and retired in March. Brown previously served as a chief utility engineer and acting general manager of City Water Light and Power, the municipal utility of Springfield, Illinois.
In early April, IMEA received notice from Fitch Ratings, one of the three national credit rating agencies that reviewed the overall credit quality of its bonds, that the agency had once again affirmed the AA minus with a stable outlook rating for IMEA.
And in addition, IMEA has investment grade credit ratings from the other two national rating agencies, Moody's Investor Service and Standard and Poor's Global Ratings.
“We're very proud of those ratings,” Brown said in a recent episode of APPA’s Public Power Now podcast.
“The agency's diligent long-term financial and resource planning through the years is what earned these exemplary ratings. IMEA's sound financial decisions” have placed it at “those fortunate positions with each of the three big rating agencies.”
The rating agencies “recognize the long-term positives of our asset plan, the accelerated bond payment amortization schedule, the positive impact of our recent 2025A bond refinancing, and the transition over the years to move to a diverse power supply, while providing our members with affordable and reliable power,” he said.
The recent bond refinancing of $473 million in remaining debt “saved our members a total of $33.6 million in gross savings and $23 million in net present value savings over 10 years.
So the remaining debt is going to be paid off in February of 2035,” Brown noted.
“And at that point, IMEA will have roughly $1.2 billion of assets with no system power supply debt and I would say that's nearly unprecedented in the industry now.”
Energy Storage RFP
Meanwhile, the board of directors of IMEA recently approved the development of a request for proposal to be issued to all member municipal utilities to apply to host a battery energy storage system project in their community.
Brown noted that IMEA is committed to transitioning to a greener power supply. “Our board of directors created and approved a Sustainability Plan that serves our agency's roadmap to achieve net zero carbon emissions in our power generation by 2050.”
In that plan, there are two benchmarks that IMEA is working on now “and it's the acquisition of 130 megawatts of solar, and then studying battery storage as a way to supplement solar and wind generation in the future.”
IMEA has surpassed the benchmark for the solar acquisition with a power purchase agreement for Bee Hollow. “It's a 150-megawatt solar generation facility, and it's expected to be operational, now weather dependent, by the end of the year.”
This past year, IMEA conducted a battery study to review the economics of incorporating battery storage into its portfolio.
The board reviewed the study and voted to follow its recommendation to conduct pilot behind the meter bulk electric system storage or BESS projects in member communities.
Ideally, one is going to be located in the Midcontinent ISO, which covers central and southern Illinois, and another project will be located in the PJM Interconnection, which covers Northern Illinois, Brown said.
“These pilot projects will allow IMEA to learn how to integrate the technology into its portfolio, into its daily market operations, and manage the economic benefits of battery storage in each RTO, which will provide the agency with valuable experience.”
The RFP will be issued to all IMEA member municipal utilities. “That way they can apply to host the pilot project in their community and then once the towns are selected, we'll issue a vendor RFP to choose a vendor to bring those battery projects online if feasible.”
Brown said that “it's probably going to be a 1 to 5 MW range type project in each RTO.”
Priorities
In the interview, Brown also discussed what his immediate priorities have been since becoming president and CEO of the three organizations.
The industry “in general is going through constant changes that are challenging and complex and that translates into a lot of increased work activities for agencies,” he noted.
Brown wants to focus on giving IMEA member utilities the tools they need to inform their elected officials and the public of the benefits of public power.
With respect to energy generation, “we need to better inform the communities of the benefits and rewards, along with the issues and the consequences of choices surrounding affordability, reliability, sustainability of any given energy resource.”
Brown also wants to further develop his relationships with members and “get to know their specific needs by visiting not just with the utility member, but by meeting with their staff and their elected officials.”
He also noted that one of the biggest items that IMEA is tackling is an integrated resource plan for all of its members.
“That's a pretty large undertaking and it'll help lay out how best to pursue resources in the future to meet the state's energy law, the Climate and Equitable Jobs Act or CEJA,” the climate law that passed in 2021 and aims for 100% clean energy by 2050.
“Maintaining predictability of that reliability, affordability, and sustainability are paramount to the outcome of the IRP and selecting the proper balance of generating and market resources,” Brown said.
Another area of focus is to fully implement an equipment share program, which is an extension of mutual aid.
The program involves the use of grant funds to purchase poles and transformers that any member can use in case of emergency and they restock it from what they've used.
Brown is also focused on IMEA employees – “engaging, empowering, encouraging them because they're our biggest asset.”
He wants to make sure that they're taken care of “and allowed to grow because we have a tremendous group here. And that's one of the main reasons I was so interested in coming to IMEA is because of the staff.”
Longer term, IMEA is looking to get into the transmission line business and partnering with some larger transmission owners “and I think that allows some of our members to have some solid returns on their investment and also reduce future energy delivery costs.”
