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West Lafayette hears warning on electric capacity prices; council moves to let mayor sign short-term aggregation contract
Summary
Palmer Energy warned village leaders that PJM capacity-price spikes and large data-center demand have driven a sharp rise in per-kilowatt-hour costs; the council authorized the mayor to sign a short-term aggregation contract after a morning pricing refresh and recommended 12-month terms to limit risk.
Bob Snavely of Palmer Energy told the Village of West Lafayette council that capacity prices have surged and are driving up electricity costs for municipal aggregation, and he recommended locking short-term agreements rather than longer terms amid market uncertainty.
"My name is Bob Snavely. I'm with Palmer Energy," Snavely said as he distributed an RFP summary and a PJM capacity memo. He said the market faces a supply-and-demand imbalance amplified by planned large data centers and by recent PJM changes that exclude renewables from capacity calculations, actions he said have pushed capacity costs sharply higher.
Snavely told council members West Lafayette's aggregation covers about 650 eligible meters totaling roughly 6 million kilowatt-hours. He advised the village to pursue a 12-month contract, saying that "locking in a high price for a long period of time we just don't think makes sense" and that short-term deals leave open the possibility that capacity prices will fall as new generation comes online.
Snavely also reviewed RFP bids. He said a Dynag 12-month offer was roughly 10¢ per kilowatt-hour and that Constellation, the current supplier, experienced a technical outage and would provide updated pricing the next morning. He asked council to designate the mayor to sign the refreshed contract so the village would not need to reconvene the full council to finalize a time-sensitive decision.
Council members agreed to the approach and put a motion on the table to allow the mayor to sign the contract after staff obtains morning refresh prices. The motion carried by voice vote.
Snavely noted a piece of good news on gas: West Lafayette's natural-gas aggregation is fixed at 0.559 per ccf through November 2026, which he said is lower than current utility rates.
Next steps: staff will obtain the updated daytime pricing from suppliers, post the refreshed recommendation, and the mayor — as authorized by the council — may execute the short-term aggregation contract on the village's behalf.
