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Thomas Clatterbuck

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What will CWLP look like in 20 years? Ensuring the city will have plentiful and reliable power is key for the wellbeing of the city. And because the City of Springfield owns the utility, this question is doubly important to residents. The city council wants to make the best planning decisions possible, and so earlier this year work began on an Integrated Resource Plan (IRP).

The IRP is a report that will help guide CWLP and the city as they decide how much capacity the power plants will have in the future, and what energy sources they will rely on. Because these decisions will have major ramifications for Springfield for decades to come, the city wanted to have as much public oversight as possible. As part of this process, the utilities committee was given a presentation on the progresses of the IRP so far. Part of the presentation was responding to public comments from the last meeting and listening to concerns from the current one.

How does the IRP work?

IRPs rely on very complicated economic models. They must first find all of the expenses the utility has now, and then predict how all of them are going to change over the coming decades. With more than 750,000 line items in the budget, that is easier said than done. This includes costs for fuel, personnel, regulatory compliance, new equipment and maintenance of old equipment.

Just as importantly, future usage patterns need to be predicted. CWLP needs to know how much power it needs to be able to produce before it can answer how it will actually do it. During the last IRP process in the early 2000s, the experts got this part wrong. Demand is 23 percent lower than the models projected, and so the other decisions that were made ended up being wrong.

The model is based on both facts and assumptions. Small changes in the assumptions can have major impacts on the final results. To create the most accurate prediction possible, nine different scenarios are being considered. These will look at what high coal prices, carbon taxes, or better renewable options will mean for the industry.

But models are impacted as much by what they leave out as by what they include. Items that are considered “out of scope” for the IRP model include health impacts, the coal ash ponds, and the proposed second lake. These factors all impact the real costs of coal-fired power plants. Most of the new public comments focused on the omission of these elements from the IRP. The decision not to include them struck some as a thinly-veiled effort to shift the outcome of the final report.

Other issues

The IRP has also suffered from delays. While the report was authorized to take six months and be ready at the end of the year. Instead, it will be presented in mid-March. This delay was caused by The Energy Authority (TEA), the company assisting with the IRP, bumping CWLP down in the priority queue. While some delays are understandable, the council noted that they had only been informed of this delay the day of the meeting.

Still, the council is more concerned about getting reliable information than a fixed timeline. Previous resource plans did not age well. The city decided to add Dallman Unit 4 in the mid 2000s based on research about how the economics of power were supposed to play out. Higher prices and demand meant protecting the rate-payers from market volatility was going to be particularly valuable. It was also believed that CWLP would be able to sell excess power on the market for a profit. However, those projections did not pan out. By 2008, energy use entered a period of “unprecedented decline,” and the price of power collapsed. Overall, energy demand is 23 percent lower than projected, and average prices are down 40 percent. While this is not to second guess those decisions, the inaccuracy of the previous analysis still has major ramifications for CWLP and the city today. So it is a good sign that the city council is doing what it can to ensure this IRP is more accurate.

The next meeting to discuss the IRP will be the quarterly utility committee meeting in January. There is no set date for that meeting yet.

To learn more about the IRP process, check out the CWLP presentations from the June and September meetings. You can also watch the full September presentation in the player.

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Senior strategist, statehouse reporter and political correspondent for Springfield Daily. Graduate of District 117 and UIS. Thomas covers stories in both Morgan and Sangamon Counties, as well as statewide politics.

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City gets good budget news tempered with warnings

Thomas Clatterbuck

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The City of Springfield is on track for a budget surplus in FY 2019. Based on current revenue, the city may have a positive fund balance of $1.7 million. This comes as something of a surprise, considering the original budget had an estimated $2.6 million shortfall. At last night’s city council meeting, Budget Director Bill McCarty explained what caused the turnaround.

Numerous factors played into the turnaround. Early tax payments, a large settlement from Comcast, and a transfer from Fund 095 to the corporate fund were key on the revenue side. Hiring delays and stabilizing healthcare cost increases have been key on the expense side of the equation.

The city’s good management has been noted by outsiders as well. The S&P affirmed the city’s AA bond rating, which helps determine how much interest is paid on new bonds. A higher bond rating is a good indicator of financial health, and so avoiding a downgrade is very valuable for the city.

Clouds on the horizon

But while the current year is better than expected, the council was given several warnings about the future. Director McCarty pointed out that much of the surplus was due to a one time settlement. That extra million helps this year, but doesn’t represent a lasting increase in revenue. While optimistic about the long

Representatives from the Police Pension fund also warned about the growing pension obligations. Pensions already consume all of the property tax revenue in the city. McCarty said that where property tax used to pay for pensions and other things, now they only pay for pensions; and even other revenue sources are being tapped to make the required payments.

The S&P also noted these long-term challenges. So while the current AA rating was affirmed, the city’s outlook was downgraded from “stable” to “negative.” Although this will not impact current interest rates, it might make future borrowing more expensive.

You can watch McCarty’s presentation to the council which starts at 55:00. You can also watch his after meeting Q&A in the player below.

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LIVE | Springfield City Council October 16th

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Follow along live with the Springfield City Council meeting. Local BSA troop 202 is present. Camp Care-a-Lot is being recognized for their work with under privileged students. Director McCarty will present on the city’s finances shortly.

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2019 Election

Langfelder, McMenamin discuss the Capital Township question

Thomas Clatterbuck

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Illinois is notorious for having too many units of government. Capital Township, which is coterminous with the City of Springfield, is widely considered obsolete. Local leaders are working to abolish the township, a move which should save taxpayers nearly $500,000 per year. But questions remain on what is to become of the township’s functions once it is dissolved. One proposal is to merge the township with the county. Supporters of this proposal point to the several county officials who also perform roles for the township. This question will appear on the November 6th ballot.

However, not everyone thinks that the county should take over the township. Mayor Jim Langfelder and Ward 7 Alderman Joe McMenamin agree that the township should be dissolved, but they think the city should take over the remaining township functions. Normally, a townships’ primary function is to deal with roads. But because Capital Township is coterminous, or lies wholly within, the City of Springfield, it has no roads to take care of. The city takes care of the roads.

The other main function of the township handles is economic development. Langfelder pointed out that while the county could perform this function, it makes much more sense for the city to handle issues that will impact its community directly. Springfield may be the largest city in Sangamon County, but the County Board represents the numerous smaller communities in the county. The Springfield City Council, however, only represents the city, and is better positioned to assist local economic needs. McMenamin went on to say that the city should be the ones decided what taxes are levied and what money are spent. He likened it to letting Indiana making decision for Illinois. McMenamin also pointed out that when coterminous townships are dissolved, they are typically dissolved into their municipality, not their county.

The ballot questions

In November, township residents will see the county’s plan to give the township to the county on the ballot. Because this is a non-binding question, the results of the vote will only be informative to the county and township board. Similarly, the proposed question by Mayor Langfelder is also non-binding and will also have no effect on its own.

Because the city council declined to put the city’s question on the ballot, voters will first need to sign the a petition to get the question on the April 2019 ballot. Langfelder will need at least 3,000 signatures to get on the ballot, but the final number of signatures they need will not be known until after the November election. Supporters of the mayor’s position are currently passing petitions, and their efforts are expected to pick up after the November election. Only voters in the township can sign the petition.

No matter what results the ballot questions bring back, the Township will still need need to vote to absolve itself. The township has already agreed to absolve itself to the county, but Langfelder cautioned that this was possibly due to the officials who overlap between the county and the township. And the county would still need approval from the state to take over the township because it is coterminous with a municipality.

You can watch our full interview with Langfelder and McMenamin in the player below. We apologize that the audio is not up to our normal standards.

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