MRES to Introduce Time-of-Use Energy Tariffs for Pella in 2023 | Local News
PELLA – Beginning in January 2023, Missouri River Energy Services will introduce time-of-use wholesale energy rates for the city of Pella. Power for electricity is generated for the city by the Red Rock Hydroelectric Project.
Joni Livingston, vice president of member services and communications for Missouri River Energy Services, provided the services update at Tuesday’s board meeting. MRES is Pella’s wholesale electricity supplier and serves 60 other communities in Iowa, Minnesota, North Dakota and South Dakota.
The Red Rock Hydroelectric Project, completed in October 2020, uses the Des Moines River at Red Rock Lake Dam to generate electricity and connects to the City of Pella – Municipal Electric Utility. The project entered commercial operation in June 2021 and is licensed to generate enough electricity for approximately 18,000 homes each year.
Pella has a long-term electricity supply agreement with MRES until January 1, 2057. The agreement allows members like Pella to generate renewable energy up to 5% of the electricity purchased from MRES.
The MRES recorded a 5% drop in energy rates in January this year and predicts that rates will not change for 2023, according to Livingston.
Now, Livingston says wholesale time-of-use rates will provide opportunities for cost savings by shifting electricity consumption to “lower-cost periods.”
“That would mean that at certain times of the day, when everyone is using electricity at the same time during your peak time, electricity will cost more,” she says. “Then overnight, when very few people are using it, that will be when electricity is cheapest, then in the morning, later in the evening and in the afternoon. Depending on the prices, your power will be mid-priced.
Livingston says the TOU tariffs will only affect the energy portion of the city’s bill. Pro forma billing, or “informational purposes only,” claims began in August 2021.
“For Pella, you should probably see a 0.1% increase based on your premium usage, so very little change,” she says. “We did it on purpose. We want to get people used to seeing what a time of use bill looks like and how time of use works. We didn’t want this to impact your costs initially.
Livingston says TOU will also help customers, including commercial and industrial, save money.
“If they can move some of their usage out of your peak hours…usually 4 [p.m.] in the afternoon at 8 [p.m.] at night, that would be your highest price time…they’ll actually save money with the usage rates,” she says.
According to City Administrator Mike Nardini, the city receives about $800,000 a year in capacity payments. These payments are part of the utility budget.
“The payment we receive from Missouri River [Energy Services] $800,000 a year is just the ability to use our capacity in case they are needed for the transmission system,” he says. “If we operate it, we receive an additional cost per megawatt hour. So $800,000 comes to town as pure capacity. If we operate it, we receive additional income on top of that. We also cover our costs this way.”
MRES was able to reimburse the city approximately $1.2 million, or 11% of its annual bill, due to decreased spending at the end of 2020. In 2021, MRES also won a lawsuit against the Federal Energy Regulatory Commission for overcharging MRES members, which was later returned to the members.
To implement TOU, Livingston recommends using the Advanced Metering Framework. Additional benefits of an AMI system include different interval minute data; readings on request of electricity meters; a reduction in reading errors and high/low bills; disconnects and connects remotely for enhanced security; use of disconnected meters to quickly shed the load; precise metering electric vehicles; and monitoring failure/restoration notification and device.
“Metering time usage would allow our consumers to make better choices when it comes to energy consumption, and overall this has many benefits for the city,” says Nardini. “I might be off the mark a bit, but when we look at our energy bills, the demand share is between 40-50% of our total energy cost.
“So anything the city can do to reduce its peak load can result in significant savings for our community, and that’s also one of the real benefits for AMI.” So again, it’s been very beneficial for the city to be part of the Missouri River. [Energy Services],” he says.
No action was taken after discussion.
In other news:
– Mitchell Monarchino sworn in as the new police officer for the Pella Police Department.
— Council awarded a bid of $778,882.75 from Pella Concrete for the construction of a concrete pavement 100 feet wide by 530 feet long, including an additional width of 50 feet, to expand the existing traffic from the municipal airport of Pella. The project will take 45 working days.