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HomeMy WebLinkAboutMINUTES-1993-08-30-1993CITY COUNCII. August 30, IM A PUBLIC HEARING was held by the Evanston City Council on Monday, August 30, 1993, at 8:15 P.M. in the City Council Chamber to receive public comment on the proposed Commonwealth Edison Franchise Agreement. ROLL CALL - PRESENT: Alderman Newman Alderman Engelman Alderman Drummer Alderman Holsman Alderman Guthrie Alderman Feldman Alderman Heydemann A Quorum being present. ABSENT: Aldermen Kent and Moran PRESIDING: Mayor Lorraine H. Morton An audio tape of this hearing has been made part of the permanent record and is available in the City Clerk's office. CITIZEN COMMENT: Richard Stillerman, 2330 Park Place, discussed alternative providers of energy, cogeneration and opposed extending the franchise agreement with Commonwealth Edison. He suggested that Council exercise patience and not commit the (Sty to many additional years with Com Ed. He urged them to explore alternatives expeditiously, which he felt would save citizens tens of millions of dollars over the years. He said that Com Ed had realized that competition threatened them - which is why they set up Northwind, a subsidiary set up to operate outside the regulatory framework. Northwind will be able to make special deals with customers Edison might lose to competitors. He said that such competition would open up avenues for lower cost energy. He felt that a seven year extension of the franchise just gave the City an extra year to procrastinate, instead of vigorously pursuing its options. He questioned why the City had not yet begun the studies of alternative energy sources. He suggested that Com Ed had a secret plan to upgrade the service system which would not be shared with the City without signing the franchise agreement, but questioned whether they were committed to solving the outage problem. He also questioned Com Ed's commitment to energy conservation. He felt that the right of inspection that had been negotiated was really feeble - an empty shell - and was an attempt to tie the City into the Northwest Municipal Conference (NWMC) Franchise Agreement. He opposed the NWMC Franchise Model Agreement, opposed the 180 day opt -out clause in the agreement and likened it to signing an agreement that after seven years you will go to prison for fifty years; unless you notify the warden six months before that you don't want to go. He urged Council to be flexible by rejecting any franchise extension and not to look at the $300,000 of free electricity that it gets from Com Ed, when savings from alternatives may save consumers tens of millions a year. He urged the Council to fund the studies of energy alternatives now, so a decision can be reached quickly on the direction Evanston should take. Robert Creamer. 1101 Ridge Avenue, speaking as Executive Director of Illinois Public Action Council, urged Comcil to reject the proposal to again purchase power from Com Ed. He noted that the energy market has changed fundamentally in the last several months and will continue to do so in the next five years. He said that Com Ed had created its subsidiary, Northwind, in response to the appearance of a number of new competitors entering the eneagy market that could provide power to Com Ed customers at lower rates. He said that changes in the market are moving so swiftly that Com Ed had to push to create Northwind this past spring or stand to lose hundreds of millions of dollars. Due to these changes, he suggested that there will be an exodus of customers from the Com 2 August 30, 1993 Ed system, leaving fewer remaining customers sharing the fixed costs of the system. He said that there are a number of competitors who are anxious to serve Com Ed customers at lower rates. He felt that by refusing to sign the NWMC Franchise Agreement the City would be in an excellent position to avoid the increase in rates that will come with fewer customers in the system and be able to take advantage of lower rates by requesting proposals from the emerging energy suppliers. He emphasized that in many cases, these are not new companies, but subsidiaries of existing energy companies. He felt that it was foolish to sign the franchise agreement, even with the opt -out provision. He related a conversation he had had with a "Com Ed insider" in Springfield last spring, when that person told him that it was critical for Com Ed to create Northwind to counter the growing competition, which he felt would snowball in the next five years. He said they needed Northwind to make counter offers to O'Hare Field, the University of Chicago and the City of Evanston. He suggested that if Evanston puts energy service out to competitive bids, it will likely get a bid from Northwind - at rates lower than those in the proposed franchise. He said that another power supplier, Torco, would be happy to submit bids to those communities who own their own distribution system and those who are considering of owning it. He said that the Torco president is eager to submit a proposal to Evanston and argues that they could provide electricity to Evanston much more cheaply than Com Ed, even considering the cost of taking over the distribution system. He also noted that if Northwind takes over supplying energy to Evanston and takes over the Com Ed distribution system, the same terms must be offered, under the new law, to any other potential supplier of energy to the city. This could mean that Evanston could take advantage of lower rates, without taking over the distribution system. He felt that there would be dozens of suppliers eager to bid if the City sent out requests for proposals. He stated that this is the largest contract of any kind that the Council will ever vote on and felt that it was outrageous that it was not put out for bid. He likened the proposed Com Ed Franchise Agreement to a contract with a private scavenger for fifty years that has no performance standards in the contract. He speculated that voters would rather sacrifice the $300,000 of free electricity for City buildings, rather than pay hundreds of dollars more for electricity in the next few years and urged Council not to sign the proposed franchise agreement, but to seek competitive bids. Jonathan Perman, Executive Director of the Evanston Chamber of Commerce, said that the Chamber Board had voted unanimously to urge Council to extend the agreement with Com Ed for seven more years. The Board supported it for the following reasons: 1) the City will continue to get free electricity for all its buildings; 2) advocates of an energy policy and energy alternatives will have a seven year window to study those options; 3) this does not lock the City into the NWMC Model Franchise Agreement; 4) potentially high legal costs are saved because the City and Edison will not do battle over use of City rights -of -way and free electricity for City buildings; 5) the Board supports the four goals articulated by the Energy Alternatives Task Force and feels this gives a window of opportunity to pursue those goals. The Board did not feel that signing the extension would take the energy question off the front burner, but urged Council to pursue the studies of alternatives quickly. He felt that by signing the seven year extension, the City still had the ability to take advantage of the changing energy market. James Matvkiewicz, 606 Lake Street, President of the Evanston Property Owners Association, strongly urged the City Council to sign the revised Franchise Agreement. He felt that the Council should focus on "the important issue in town" - real estate taxes. He did not believe that citizens were as concerned about their electric bill as they were about their property taxes. He urged Council to direct their energy to reducing the City budget and to work with the schools to reduce theirs and not to waste their time considering municipalization of electric service. He said that most citizens are not in favor of spending millions of dollars on a municipalization process. David Kraft, 2773 Garrison Avenue, representing Nuclear Energy Information Service, said that there had been inadequate notification of the public hearing and registered a strong protest over the void of information emanating from the City concerning the status of the negotiations. He complained that no information had been sent to Energy Alternatives Task Force members, as had been customary in the past. He also complained that no information had been sent to Environment Board members, nor had the Energy Alternatives Task Force received any formal notification that they were disbanded. He said that many members had expressed a desire to transmit a final communication to Council and staff concerning its work over the past four years. He stated that members of the Task Force had only received information about this meeting because of the request by its chair and felt that 48 hours was not enough time to digest that information and prepare meaningful comments. He did not feel that this should be considered a legal public hearing on this issue and did not feel that the information given allowed for "informed consent" by the public. He did not think that the Evanston Review should be used as the official organ of the City for disseminating such information. He questioned why Task Force members, the Pollution Control Board (sic) and the Energy Commission had not been briefed on the proposed agreement. He suggested that the $300,000 earmarked for energy studies could be better used to gold-plate Bernie Stone's wall if "the last three months `black hole' of information on franchise issues" is any indication of the regard that the City holds for the 1 August 30, 1993 franchise and the proposed energy policy. He questioned why there was a rush to approve the agreement and suggested that there was no need for Council to act by a specific date. He objected to the "rush" in scheduling the hearing tonight and to introducing the ordinance on September 13. He asked that no vote be taken until the community is truly informed about this issue. He made reference to a letter from Corporation Counsel Siegel concerning the Arlington Heights case being reviewed by the Illinois Supreme Court and said that if the decision goes against Arlington Heights, that representatives of the NWMC should be down in Springfield "screaming bloody murder about the Arlington Heights situation. He said that the Energy and Environment Committee of the State House continually bottles up any meaningful legislation on energy or environment issues - and penalizes communities like Evanston - but they do nothing about it. He suggested that the proposed franchise agreement be referred to the Task Force for their comment, since the Council has been reduced from eighteen to nine and some of the newly - elected members may not be as familiar with the issue as they should be. He felt that some kind of outside counsel could help them make a more informed decision. He questioned the timing of the break -through in negotiations and suggested that Com Ed sees the lack of experience by the newly -elected Council and mayor and the lack of information available from the advisory committees during this "sluggish transition period" as an opportunity to stampede them into a hasty decision that may not be in the best interests of the community. He made reference to the changes in the energy market and urged Council not to get locked into a fifty year contract. He said that the $300,000 earmarked for studies of the municipalization option and to develop an energy policy should not be contingent on a franchise agreement but should be money from the City budget dedicated for that purpose. He also felt that the millions of dollars that this contract would cost citizens over its fifty-year life was too much to pay to receive free electricity for traffic lights and to "zero out" our mutual court cases. He said that the NWMC Franchise Agreement is flawed and urged the City not to rush headlong toward it because of a few concessions, which may be mere illusions to trick the City into thinking it has won the battle, when it has really lost the war. He offered the help of his company and that of the Task Force to discuss the recommendations. In response to questions from Alderman Feldman, Mr. Kraft said that the municipalization study option unfortunately was tied to the availability of funds, but funds are available, could be completed in eighteen months to two years. If Council wished to move on a faster track, several things could be done at once and the time period compressed. Mr. Kraft said that the members of the Task Force and the Environment Control Board had agreed to work together on an energy policy, but nothing has happened on that. He noted that in the early 1980's, the City came up with an energy policy in a year, and he felt it could be accomplished that quickly again. He also said that the community had to educate the public about energy, which he characterized as the only resource that sets us apart from the Middle Ages and stressed its importance to a community. Alderman Feldman shared Mr. Kraft's concerns about the lack of publicity for the hearing and the lack of definite direction concerning the Task Force and said he had a sense that Mr. Kraft, and perhaps other members of the Task Force, were encouraging Council to stay the course and to examine costs and options. He explained that was what Council had in mind when they voted to extend the franchise for five and a half years last January. He felt that time was a benefit and reminded Mr. Kraft of the community meetings they had held where only three or four people showed up - after an extensive publicity campaign. He stressed that to educate the public would take time and a lot of hard work and suggested that there is a possibility that there will have to be a referendum on the subject. He emphasized that the Negotiating Team felt that this extra time to study options did absolutely nothing to dilute the Council's sense of purpose. He did not see any inconsistency in Mr. Kraft's position and that of the Council and felt that they were all committed to the same values, but Council wanted to use this time to study their options, develop an energy policy and place themselves in a position to make the kinds of decisions that Mr. Kraft advocated. In response to a question from Alderman Newman, Alderman Feldman said that the Negotiating Team had planned to have Council vote on Franchise Agreement at the second meeting in September. Alderman Newman requested that the City get an update on whatever legislative deal Com Ed received with regard to Northwind. He also asked that the Council receive a communication from or presentation by the president of Torco within the next month. He also felt that the Mr. Creamer had raised a legitimate question about the competitive bidding and asked the City Manager's office to clarify why competitive bids were not being sought in this case. He suggested that it would be possible for the Task Force to convene sometime during the next 28 days to do whatever they want to do with the recommendations being made by the Negotiating Team. Alderman Feldman asked whether it would be possible for the Task Force and new members of the Energy Commission to meet before the September 13 meeting and report back to the Council regarding this. He said he would welcome their comments and said that he had missed their advice. However, he was not sure it still existed. 4 August 30, 1993 Mayor Morton said that it was her understanding that the Task Force ceased with the last Council and noted that Mr. Kraft was the only member who had applied to be on the Energy Commission. Mr. Kraft said that the Task Force was not sure what their status was, but that some members had indicated that they would like to make a final report to the Council. Alderman Newman said that his understanding was that the Energy Commission was the successor to the Task Force. But, since the Energy Commission did not have its full compliment of members, he felt that it would be valuable for the Task Force to get together and give the Council whatever informal advice they would like to give. It would be helpful for the Council. Alderman Feldman agreed and requested that the Task Force set a meeting and report back to the Council. He felt that its members understood what the Council was requesting. Rearesentative Janice Schakowskv. suggested that Council seemed ready to snatch defeat from the jaws of victory and urged them to refrain from locking Evanston into a "bad deal," and said that everyone who could get out of deals with Com Ed was doing so. She told of Com Ed's intense lobbying efforts with legislators in Springfield to allow them to set up Northwind this year to take advantage of changes in the energy market. She disagreed with anyone who said that energy costs are a small issue with citizens and noted that the August bills will be astronomical because of the heavy use of air conditioning. She said that if Evanston's rates could be reduced by 20%, it would save $10 million a year, and felt that $300,000 in free electricity pales in comparison. She suggested that Evanston not sign the franchise agreement, but put out requests for proposals from energy suppliers. She predicted that the City will be deluged by proposals. She felt that to put out the word that the City is interested in other proposals would not require complicated studies, just to let the free market take over. She noted the irony that she was arguing the free market, while the Chamber of Commerce argued that the City lock itself into a monopoly utility company. She urged them to put out the word, wait for the proposals and then hire experts to help sort out which proposals would be most beneficial for the City. There are a number of companies that are anxious to do business with Evanston if it is smart enough to take them up on it. She said that it is not smart to sign the Franchise Agreement now and felt that the City would be the laughing stock of the utility field if it did. Now is the moment to take advantage of competition and excess capacity all over the country. Commonwealth Edison realizes that and that is why they created Northwind. She questioned whether the City is smart enough to make its move now and urged the Council not to sign the franchise. Aldermen Newman, Feldman, Heydemann and Mayor Morton discussed what information was needed by the aldermen before the next meeting and how that information could be obtained. Alderman Heydemann pointed out that, in addition to the announcement in the Evanston Review, this Public Hearing was announced at the last City Council meeting. Mayor Morton said that due to the confusion about the status of the Task Force and the fact that this is a public hearing not a Council meeting, she felt that the Task Force should wait to meet until it receives a formal directive from the City Council at the next meeting. She also suggested that Mr. Kraft encourage any members of the Task Force who wish to be members of the Energy Commission to obtain applications from the City Clerk's office. Mr. Creamer suggested that Council hear presentations from other providers of energy before they vote on the Franchise Agreement. Alderman Feldman questioned whether this could be done in writing. Mr. Creamer suggested that a meeting would be better. Alderman Newman questioned why he could not make motions to seek additional information in a public hearing and said he would move to hold over the Franchise Agreement if he did not have the information he wanted in time for the vote. Alderman Drummer clarified that an alderman is not prohibited from asking for information in a public hearing, but noted that you can't convene a Task Force that no longer officially exists. Alderman Guthrie asked Mr. Kraft to send her information on the Nuclear Energy Information Service. She also stated that she felt that the Council owed it to the public to only do the business that they had said that they were going to do when the meeting was called. Mayor Morton announced that the Commonwealth Edison Negotiating Team had requested that the ordinance to approve the Franchise Agreement be introduced on September 13th and that it would be so introduced. With no additional citizens signed up to speak, Mayor Morton declared the Public Hearing over at 9:53 P.M. KIRSTEN F. DAVIS CITY CLERK