Electricity Markets

Public power cities move forward with new Missouri power pool

A newly formed municipal power pool in Missouri is moving forward with two members initially after the Mount Vernon City Council gave final approval Nov. 28 to join the Southwest Missouri Public Energy Pool.

Mount Vernon City Clerk Shannon Neely said Nov. 29 the vote was 7-0, with one member absent. The Monett City Council previously gave its final approval.

The cities of Mount Vernon and Monett plan to sever their longtime, full-requirements relationships with investor-owned Empire District Electric of Joplin, Missouri, once their existing wholesale power contracts expire on June 1, 2020, said Dennis Pyle, Monett's city administrator.

They recently entered into a full-requirements arrangement with the Missouri Joint Municipal Electric Utility Commission, a joint action agency. MJMEUC, whose members include 67 municipally-owned retail electric systems statewide, authorized creation of the new power pool in September.

"MJMEUC is a joint action agency and the new power pool would come under its auspices," said Ewell Lawson, Vice President of Government Affairs, Communications, and Member Relations at the Missouri Public Utility Alliance. MJMEUC will serve as the pool administrator.

The Missouri Public Utility Alliance represents municipally-owned electric, natural gas, water, wastewater and broadband utilities. The alliance includes three closely aligned, yet distinct organizations: the Missouri Association of Municipal Utilities, MJMEUC and the Municipal Gas Commission of Missouri.

Skip Schaller, Monett’s general manager of utilities, said he supports the city’s move to form the pool.

“Monett and Mount Vernon have spent the last year exploring our options and came to the conclusion that going out on our own to purchase power made sense in a couple ways,” he said. “First, we feel we will see some significant savings with the market being favorable at this time. Second, we feel we have control of the decisions being made on our behalf. We will have say over our energy portfolio and be able to make decisions as a pool if we want to own any assets.”

The new power pool aims to hit the ground running even though its members still will receive power from Empire for more than two years.

Pyle said MJMEUC, along with Monett and Mount Vernon, soon will begin to prepare a formal request for proposals to be sent to potential power providers sometime in 2018. "We would expect to approve RFPs in late 2018," he added.

As both Monett and Mount Vernon, with a combined load of 77 MW, are interested in renewable energy, Pyle anticipates that wind energy may play a substantial role in their resource mix going forward, possibly along with smaller amounts of solar, natural gas and even coal.

Empire has been diversifying its resource portfolio in recent years. Once a largely coal-fired utility, it announced plans on October 31 to develop 800 MW of wind energy in or near its service territory by the end of 2020.

It also intends to retire the 198-MW Asbury coal-fired power plant near the Kansas border by April 2019.

Canada's Algonquin Power & Utilities completed its acquisition of Empire on January 1, 2017.

Empire officials did not respond to an email seeking comment on the new buying pool.

Pyle said Monett had no "overriding reason" to break away from Empire. "We weren't having any issues with Empire, but we wanted to look at other options when that [wholesale] contract expires."

Currently, Monett is paying an all-in price of 6.8 cents to 7 cents/kWh for power from Empire, he said. He believes Monett may be able to beat that price through the power pool.

"Price was very important to us," he said. "If we thought we could get a better price and pass that on to customers, it would be a benefit to our residents. We also wanted the ability to determine our resource mix because we had expressed to Empire some of our concerns" related to Empire's multimillion-dollar investments in pollution controls for the Asbury and Riverton coal plants.

As time goes by, the Southwest Missouri Public Energy Pool is expected to grow. Lockwood, Missouri, and Chetopa, Kansas, also considered joining the pool but have not yet done so.

"We reached out to the city of Nixa and the city of Carthage" in Missouri, Pyle said. Eventually, "they could be members or energy providers" to the pool.