MRES to introduce time-of-use energy rates for Pella in 2023

Aug. 18—PELLA — Beginning January 2023, Missouri River Energy Services will introduce wholesale time-of-use energy rates for the City of Pella. Energy for electricity is produced 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 service update during Tuesday's council meeting. MRES is Pella's wholesale power provider 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 the Lake Red Rock Dam to produce electricity and connects to the City of Pella — Municipal Electric Utility. The project went into commercial operation in June 2021 and is licensed to produce enough electricity for about 18,000 homes each year.

Pella has a long-term power supply agreement with MRES until Jan. 1, 2057. The agreement allows members like Pella to generate renewable energy up to 5% of power bought from MRES.

MRES saw a 5% decrease in energy rates in January of this year and are predicting 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 usage to "lower-cost time periods."

"That would mean that during certain times of the day, when everybody is using power at the same time during your peak time, power is going to be a higher price," she says. "Then, overnight when very few people are using it, that will be when the power is the cheapest, then mornings, later evenings and afternoons. Depending on what the prices are, your power is going to be mid-priced."

Livingston says TOU rates will only affect the energy portion of the city's bill. Shadow billing, or "information only" claims, began August 2021.

"For Pella, you should probably see a .1 percent increase based on your premium usage, so very little change," she says. "We did that purposefully. 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 that to make any impact on your cost at first."

Livingston says TOU will also help customers, including commercial and industrial, save money.

"If they can shift some of their usage off of your peak times ... typically 4 [p.m.] in the afternoon to 8 [p.m.] at night, that would be your highest price time ... they will actually save money with usage rates," she says.

According to City Administrator Mike Nardini, the city receives about $800,000 per year in capacity payments. These payments are part of the electric utilities budget.

"The payment we receive from Missouri River [Energy Services] of $800,000 per year is just the ability to use our capacity in case they're needed for the transmission system," he says. "If we operate it, then we receive a cost per megawatt hour on top of that. So $800,000 comes to the city just as pure capacity. If we operate it, we receive additional income on top of that. We cover our costs that way as well."

MRES was able to refund the city about $1.2 million, or 11% of its annual bill, due to a decrease in expenses at the end of 2020. In 2021, MRES also won a legal case against the Federal Energy Regulatory Commission for overcharging MRES members, which was then given back to members.

To implement TOU, Livingston recommends using Advanced Metering Infrastructure. Additional benefits from an AMI system include different interval minute data; on-remand readings of electric meters; a reduction in misreads and high/low bills; remote disconnects and connects for improved safety; use of disconnect meters to shed load quickly; accurate metering electric vehicles; and monitoring of an outage/restoration notification and device.

"Time-use metering would allow our consumers to make better choices on consumption of energy, and overall, that has a lot of benefits for the city," says Nardini. "I may be a little bit off on this, but when we look at our energy bills, the demand portion is somewhere between 40-50 percent of our total energy cost on this.

"So, anything that the city can do to shave its peak load can have significant savings for our community, and that's one of the real benefits to AMI as well. So, again, it's been very beneficial for the city to be a part of the Missouri River [Energy Services]," he says.

No action was taken after discussion.

In other news:

— Mitchell Monarchino was sworn in as a new police officer for the Pella Police Department.

— Council awarded a bid of $778,882.75 from Pella Concrete to construct a 100-foot wide by 530-foot long concrete pavement, including an additional 50 feet in width, to expand the Pella Municipal Airport's existing apron. The project will take 45 working days to complete.

Emily Hawk is the associate editor of the Ottumwa Courier and the Oskaloosa Herald. She can be reached at ehawk@oskyherald.com.