MUNSTER | The town's new electric utility fund went into effect Tuesday.
At their Friday meeting, Munster Town Council members established that fund to collect revenue from the generation and sale to NIPSCO of electricity produced by the methane gas-to-energy project at Centennial Park.
Municipalities can’t sell electricity on the open market because they are not utilities. The town can, however, sell the electricity generated to NIPSCO. The tariff the utility company must pay is 7 cents per kilowatt hours, according to the Indiana Utility Regulatory Commission.
All expenses related to the operation and maintenance of the electric generating plant will be paid from this fund. Other expenses paid by the fund will include:
• 100 percent of expenses for all power and natural gas expenses used to irrigate Centennial Park, $120,000;
• 100 percent of all expenses for electric power at Community Park and other parks, estimated at $45,000;
• 100 percent of all energy-related expenses for traffic control devices, an estimated $20,000;
• A minimum of $270,000 of related expenses for street lighting;
• Expenses for air permit compliance;
• Funding for non-covered repairs and supplies for operation of the project.
As money becomes available, the electric utility fund will also be used to pay other electrical costs from non-utility operating funds. In addition, an amount will be set aside annually for depreciation.
Until revenue is produced, the council will appropriate money to be placed in the fund to pay those expenses. That spending authority and additional appropriations will be on the agenda at the Jan. 14 Town Council meeting.
“In future years, as we close out the fiscal years, we can consider reallocating unspent (fund assets) toward the debt retirement program currently underwritten by the tax increment financing fund,” said Town Manager Tom DeGiulio.
“Another option for the council would be to direct more savings toward operating funds to pay more energy-related expenses,” he said.
Funding for the project came through two grants from the U.S. Department of Energy and the Munster tax increment financing fund. The Munster Redevelopment Commission authorized $2.5 million from the TIF fund to pay Energy Systems Group to build the plant. ESG also has a five-year contract to operate and maintain the plant. Centennial Park is part of Munster’s TIF district.
DeGiulio credits U.S. Rep. Pete Visclosky, D-Merrillville, and former U.S. Sen. Dick Lugar, R-Ind., for helping Munster obtain the federal grants.