Westerville staff previews plan to buy AFEC share, pursue local solar PPAs to reduce peak costs

Westerville electric utility staff on Jan. 14 told the City Council work session they are pursuing two major steps to reshape the city's power supply: assuming a portion of a long‑term, take‑or‑pay share in the AMP Fremont Energy Center (AFEC) and signing local solar power purchase agreements (PPAs) through Clean Energy Ventures to cut summer peak costs.

The presentation, led by Electric Utility Manager Chris Monticelli, said Westerville will move away from full‑requirements contracts that expire at the end of 2026 toward a diversified block‑and‑index portfolio. "We don't own any generations. So we purchase all of our energy and then supply it to our customers," Monticelli said, explaining why the city is seeking ownership shares and local solar to control cost and reliability.

Monticelli described AFEC as a combined‑cycle natural‑gas power plant in Fremont, Ohio, rated about 685 megawatts (up to roughly 745 MW at peak) and brought online in 2012. Under the AMP arrangement, participants take fixed percentage shares of the plant's output under a 35‑year take‑or‑pay contract that began in 2012; staff said some existing participants are offering to sell portions of their shares and AMP has members willing to offload roughly the 15 megawatts Westerville is targeting. "If we proceed with this, we would actually be taking a certain percentage of shares equal to that 15 megawatts," Monticelli said.

Pam Sullivan, chief operating officer at American Municipal Power (AMP), and Willie (identified in the presentation as vice president of generation operations) described the plant's operations and contingencies. Willie said the plant is configured in a "2 by 1" arrangement (two gas turbines and one steam turbine) with multiple step‑up transformers and routine maintenance practices intended to minimize multi‑year outages. He said the longest recent outage has been about 60 days and AMP maintains preventive and predictive maintenance programs, spare‑parts planning and insurance. Monticelli identified the primary risk as a prolonged plant failure that could leave participants paying debt while buying replacement power.

Staff said an AFEC subscription differs from a standard PPA because participants assume a permanent percentage of the project's share; AMP issues the project debt and the debt remains on AMP's books rather than Westerville's. Sullivan explained AMP conducts a "weak‑link" analysis for rated debt, measuring participants' ability to assume additional shares if a member defaulted. Monticelli added that participating also yields capacity credits in PJM's capacity market, which can lower net cost to participants.

On local renewables, Monticelli said Westerville has executed a memorandum of understanding with Clean Energy Ventures (a regional deployment group started by the Columbus Partnership) to start engineering, roof and site assessments, and system‑impact studies for up to 10 megawatts of local solar on city rooftops, carports and ground mounts; staff suggested beginning with roughly 5 MW while evaluating viability. "We've executed a memorandum of understanding so that we can kinda begin the engineering," Monticelli said. Clean Energy Ventures representatives were in the room; Monticelli and others said the group can structure 20‑year PPAs that include roof or carport work and use domestic content and tax‑credit advantages to reach competitive rates (staff cited indicative PPA pricing near 5¢/kWh for some sites).

Staff said local solar would generate energy at the city site and, crucially, reduce Westerville's measured coincident peak in PJM. That reduction in the five coincident peak (5 CP) metric would lower capacity and transmission charges because the city's effective load seen by PJM would be reduced when solar is generating. Monticelli said the city needs about 10 megawatts of summer peaking energy and roughly 15 megawatts of intermediate energy, and that the AFEC share and local solar help fill different parts of that portfolio.

Neither AFEC participation nor the solar PPAs are final. Monticelli said staff has begun legal and contract review of the AFEC participation and has an executed MOU and initial engineering work for solar; both items would require future City Council approval before contracts are signed. Council members asked for more public‑facing explanations of costs, contingencies and the reasons for each step; several members emphasized affordability as the threshold for moving forward.

Monticelli also noted other portfolio pieces already in place, including a small wind allocation and 30 megawatts of base energy purchased through AMP, and said the portfolio approach allows the city to buy smaller blocks of differing resources over time rather than relying on a single supplier.