Money to burn
CWLP faces the future
I was nervous, opening my latest light bill.
Late June and early July had been sweltering, and I don’t skimp on air conditioning. Plus, the air had gone out for a couple of days, forcing emergency installation of window units. The bill was higher than usual, which I had expected, but not staggering. It could have been worse.
It also could have been better, according to studies commissioned by the Sierra Club and the Greater Springfield Chamber of Commerce. Both tree-huggers and tree-cutters say we’re paying millions of dollars more than we should to City Water, Light and Power, which has been paying more to generate power than it would have to pay if it simply bought somebody else’s juice from the grid.
The chamber’s report is particularly sobering. In 2016, the average Springfield household paid $500 more for electricity than would have been the case if CWLP had shut down its power plants and bought from the grid.
This is the sort of thing that should capture anyone’s attention. And so I checked out Ameren. Sure enough, the private sector is underselling CWLP – I would’ve saved $25, give or take, on my current bill if I’d bought my power from Ameren, which offers the best deals in the state, according to the Citizens Utility Board, a creature of the General Assembly.
I am not outraged. After all, we’re still paying less per kilowatt-hour than the state and national average. You wanna see high electric bills? Check out Los Angeles, which is mulling construction of a massive pump station, powered by wind and sun, that would send water spilled from Hoover Dam back into Lake Mead to replenish the reservoir. What sounds like a perpetual motion machine would actually be a battery of sorts with an estimated upfront cost of $3 billion for a city where homeowners already are paying nearly 18 cents per kilowatt-hour, roughly 30 percent more than we pay in Springfield. If you think that’s steep, try Mexico, where folks earn considerably less, it’s hot and rates top out at around 25 cents per kilowatt for folks like me who need AC.
Comparing power rates and, more importantly, figuring out what the future holds is complicated stuff, which is why the chamber and the Sierra Club and CWLP have hired consultants to either figure out what we should do or provide answers that fit the client’s wishes. One thing is clear: Natural gas costs less than coal, which explains why Ameren is cheaper than CWLP and vice versa, before gas prices plummeted. Equally apparent is that CWLP never has behaved like a business and never will.
I discovered this years ago, when former Mayor Tim Davlin and then CWLP general manager Todd Renfrow, whose experience as chairman of the Sangamon County Democratic Party and Davlin’s political adviser no doubt were vital in guiding the utility to prosperity, met with editors and reporters at the State Journal-Register, where I once worked. Dallman 4, a coal-fired generator that cost $500 million, was about to open, and, by gosh, we should have made it bigger. We’ve run some numbers, and see how much we can make by selling coal-fired power on the grid – it’s enough buy some fire engines. What about using the largesse to reduce electric bills for city ratepayers, I asked. The mayor and Renfrow looked at me like I had three eyes.
That was back when CWLP boasted the lowest rates around, a selling point for real-estate agents pitching properties: Chatham schools, Springfield utilities! CWLP no longer is the cheapest, but it still doesn’t behave like a business. Ameren, after all, doesn’t give away power for street lights, nor does it keep the lights on when customers fall millions of dollars behind on bills, as the state did when it stiffed CWLP during the budget impasse. At last check, Ameren never has been sued by someone on the grounds that the utility, rather than drive the hardest possible bargain, agreed to pay a premium for fuel for fear that a coal mine otherwise would go bankrupt and put people out of work.
The future is hard to predict. Barely more than a year ago, Wall Street analysts were saying that Big Oil was in crisis because of fracking. Crude was struggling to break the $50 mark – once the price went north of that, frackers would do what they do best and flood the market, the wise guys predicted. Big oil companies plowed money into shale fields, and the price for a barrel of crude has jumped to $70.
And so betting the farm on future fuel prices is, well, a bet, and gamblers sometimes lose. Right now, we’re losing from the city’s dependence on coal, but it’s too soon to panic. It is never too soon to open your mind, and so a CWLP shutdown should be on the table along with everything else, including intangibles. You can’t put a dollar value on autonomy, but a municipally owned utility that could dangle incentives to help lure new businesses is, in theory, a good thing. So are reduced carbon emissions.
Its fans need to stop referring to CWLP as a crown jewel – at this point, it’s more mystery than magnificent. With the city, the Sierra Club and the chamber all having retained consultants, there are plenty of experts. What we need are clear heads and backbone.