GALION — Ohio Citizen Action will host a town meeting in Galion, Ohio, to present the findings of a new report on the costs of the Prairie State coal plant. The plant, located in Southern Illinois, was developed by Peabody Energy, but 95% of the ownership was transferred to municipal utility agencies across the Midwest. The plant is over budget, behind schedule, and not yet producing electricity as promised. Sixty Ohio communities, including Galion, have long-term “take-or-pay” contracts with this plant for fifty years. For more information and a complete list of the Ohio communities who have contracts with this plant, see www.prairiestatecoalplant.org.
TOPIC
“Prairie State Coal Plant: The Promise vs. the Reality.” What do the soaring costs of this plant mean for electric customers in Galion and the 59 other Ohio communities who have signed 50-year contracts for this plant?
SPEAKERS
David Schissel, Director of Resource Planning Analysis, Institute for Energy Economics and Financial Analysis, Cambridge, MA
The meeting is open to the public. Residents and officials of all communities who have signed contracts for this plant are invited to come to Galion for the meeting.
Come and learn how the costs of this plant could affect your electric rates — you may be shocked!
For more information contact; Sandy Buchanan, Ohio Citizen Action, 216-861-5200, ext. 315, or Don Faulds, concerned Galion citizen, 419-468-3936
CLEVELAND — “Fourteen people gathered outside Cleveland City Hall Thursday to protest what they fear will be higher electric bills resulting from Cleveland Public Power‘s investment in an Illinois electric plant.
‘Now we’ll end up paying more for CPP power than we will if we had CEI [FirstEnergy],’ said Hattie Porter of Cleveland. ‘But CPP has no subsidies to help us senior citizens. If we don’t pay our bill, our power gets cut off.’”
GALION — “Galion purchased a 9.952 megawatt share Prairie State Energy Campus, roughly 40 percent of what Cleveland purchased said Galion City Councilwoman Roberta Wade.
‘We are trying to access what exactly that means for our municipal electrical utility as we find ourselves dealing with take-or-pay contract, unlimited liability and having to sell excess Prairie State power in the open market,’ Wade said during opening statements on a live phone-based news conference about the Prairie State issues.
‘In hindsight it is clear that municipal utilities should not be invested in risky energy speculation,’ said Wade. ‘Private investors certainly can make the decision to invest in energy speculation but it is just not appropriate to gamble with the public’s money.’”
Kent Carson of American Municipal Power and Galion City Manager Gene Toy.
GALION — “Toy says it is true to megawatt per hour rate Galion will pay Prairie State Energy increased from the time the agreement was approved in 2007 to the time construction was completed and it started generating electricity.
But he says the increase has been expected, and he does not believe it’s an added expense the city cannot handle, and doubts residential electric rates will increase.
Toy says Galion residents pay less per kilowatt hour than do customers of American Electric Power and First Energy, and the rates with Prairie State are locked in for thirty years.”
The Prairie State Energy Campus under construction in 2010.
NEW YORK, NY — “But at least for the near term, the owners will be paying extra for electricity, according to a report produced at the behest of anti-coal groups. When the construction cost rose from the $4 billion estimate to what the opponents put at $4.9 billion, the price of electricity from the project, which includes the capital cost, went above the cost of electricity bought on the open market in the Midwest, according to the report, produced by the Institute for Energy Economics and Financial Analysis, a nonprofit group in Belmont, Mass.
‘The Prairie State coal plant is turning out to be the financial and environmental nightmare that many of us feared when the plant was proposed,’ said Sandy Buchanan, executive director of Ohio Citizen Action. Mostly because of the low price of natural gas, a megawatt-hour of electricity in Ohio now wholesales for about $40, but power from the first unit of the plant, which went into service in June, costs about $60, the groups pointed out, and the customers face some additional charges because of a slight delay in getting the generators into service. The second half is due on line late this year.”
Report: Through 2025, those with a stake in coal-fired plant will pay above-market prices
COLUMBUS — “Environmentalists have been critical of Prairie State because it uses coal at a time when the electric-power industry is moving toward more use of natural gas and renewable energy. The Energy Information Administration reports that Prairie State is the only new coal plant in the country to come online this year.
The plant was started by Peabody Energy, a coal company, which then sold nearly all of its interest to municipal-power companies in several Midwestern states. AMP, which provides power to city-owned utilities, owns the largest share.
In Ohio, the 12 communities with the largest investments in Prairie State will pay a premium of $135 million, the report says.”
Miners drive down to the Lively Grove coal mine near Marissa, Ill., during a shift change. The mine is operated by Prairie State Generating Co. and provides fuel to an adjacent power plant.
COLUMBUS — “A dozen Ohio communities will pay a premium totaling $135 million for electricity because of contracts with an Illinois power plant, according to a new report.
The figure is an estimate of how much money the cities – including Cleveland, Bowling Green and Galion – will pay for power in excess of market prices between now and 2025.
Residents in those places are paying for Prairie State Energy Campus in southwestern Illinois, a coal-fired power plant that began operating this summer. American Municipal Power of Columbus owns 23 percent of the plant and has sold shares to 60 of its member communities in Ohio.”
WASHINGTON, D.C. – “Higher utility bills for 2.5 million ratepayers in eight states and billions of dollars in fiscal fallout for elected officials in hundreds of communities are expected now that the cost of electricity from the Prairie Energy Prairie State Energy Campus (PSEC) coal-fired power plant will be 40 to 100 percent higher than promised by Peabody Energy, according to a major new report from the Institute for Energy Economics and Financial Analysis (IEEFA).
Sold by Peabody as a cheap source of power to public power entities representing 217 municipalities and 17 electric membership cooperatives in Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio, Virginia, and West Virginia, the PSEC project is now behind schedule, well over budget (with construction costs estimated as high as $4.9 billion versus the original $1.8 billion projection), and not yet producing power as promised, according to the new IEFFA report, ‘The Prairie State Coal Plant: The Reality vs. the Promise.’
Based on a detailed review of documents for the communities in Ohio and Missouri, the IEEFA report estimates annual losses per community through 2025 will range from $3 million to $56 million, reflecting the ‘significant fiscal problems and stresses for the participating communities’ in the troubled PSEC project. Since 2007, Peabody Energy has shifted 95 percent of its exposure in the PSEC onto the backs of local communities and coops.”
— press release, Institute for Energy Economics and Financial Analysis
Finance Committee Chair Roberta Wade speaks at a Galion city council meeting.
GALION — “The efforts of Galion Councilwoman Roberta Wade to share her concerns about the operations of the Prairie State Energy Complex, and the City of Galion’s role in that project, will be highlighted this Wednesday during a nationally-broadcast news conference to release the results of a new report issued by the Institute for Energy Economics and Financial Analysis.
A press release received by GalionLive on Monday shares the following:
Coal giant Peabody Energy promoted the controversial Prairie State Energy Campus to public officials in more than 200 communities in eight states as a cheap, long-term source of power. But a new report from the Institute for Energy Economics and Financial Analysis (IEEFA) will show that the troubled coal-fired power plant and coal mine operation will end up costing cities and towns up to 100 percent more for that power than what was promised.
Behind schedule, over budget and not producing electricity as promised, the Prairie State Energy Campus is a 1,600-megawatt, coal-fired electrical power station and coal mine under construction near Marissa, Illinois, less than 50 miles from St. Louis. About 95 percent of the project is being financed by in excess of 200 local government units in eight states: Virginia, Ohio, Kentucky, Indiana, Illinois, Michigan, Missouri and West Virginia. While all the units of government now face major financial risks, the most severely exposed are the scores of communities that signed contracts that will force them to pay their share for Prairie State even if it never produced a single watt of power.”
CLEVELAND — Mark Gerken, President of AMP, is distributing this letter to AMP communities in response to the July 16, 2012 NewsNet5 investigation of the Prairie State coal plant.
Gerken’s letter is undated but was sent after the program aired.
GALION — “A week ago today, an exchange between Galion City Councilwoman Roberta Wade and City Council President Gail Baldinger centered on a possible “public meeting” locally involving an official from an organization called Ohio Citizen Action.
At issue was the nature of the meeting itself. Wade shared that it would be a normal Finance Committee meeting, albeit held in a larger venue. Baldinger, however, expressed the view that calling it a “public” meeting and having it in an alternative location would increase the chances that it would serve as a “bashing” instead of a normal meeting.
In light of this dialogue, we thought it made sense to look at the organization which would be invited to participate, Ohio Citizen Action.”
CLEVELAND — “Cleveland and other cities are partial owners of both plant, along with American Municipal Power.
AMP is a non-profit corporation based in Columbus, Ohio, that owns and operates electric facilities for member cities.
‘Who keeps getting us in these deals?’ asked Polensek.
One consistent supporter has been Cleveland Public Power Commissioner Ivan Henderson, who also serves on the board of American Municipal Power.
That’s a concern for Cleveland Councilman Brian Cummins who questions whether there is a conflict of interest with Henderson serving in both positions.”
CLEVELAND – Cleveland is among 60 cities and towns across Ohio that paid millions of dollars in bond payments for a new, $5 billion power plant that produced no electricity for months.
The Prairie State Power Plant, located in southern Illinois, was financed through the sale of municipal bonds.
Interest payments on bonds became due last March and triggered huge payments for cities like Cleveland, which is being billed $251,536.80 monthly.
Meanwhile, the plant produced zero electricity while bond payments since March totaled $3.7 million that cities were required to pay.
Galion Council listens to input from City Building Inspector Matt Ross.
GALION — “The tensest exchange of the evening came during the Finance Committee report, which was shared by Committee Chairwoman Roberta Wade. Wade began by telling Council that the requested analysis of electric rates made several weeks ago to Belinda Miller, local representative of the Ohio Auditor’s Office that provides oversight to Galion during its fiscal emergency, was not due to be completed until August. She also said that Miller was also unwilling to be involved in a community meeting setting until Council had a clearer understanding of Galion’s electrical rates and investment situation.
With that in mind, Wade then suggested that the next Finance Committee meeting be held as a ‘public meeting,’ with an invitation extended to Sandy Buchanan, Executive Director of Ohio Citizen Action, to enlighten Council and citizens on the City’s total electricity picture. According to Wade, the official has a ‘wealth of information’ to share on the subject.
At this point, Council President and Committee Member Gail Baldinger began questioning Wade about this course of action. He first inquired as to cost, to which Wade replied that Buchanan would appear at no cost. Baldinger then asked the reason for a ‘community meeting,’ and not simply a ‘public meeting,’ such as those regularly held by the Finance Committee. Wade shared that the two are actually a distinction without a difference, but that the Council room venue would likely be too small for such a meting.”
GALION — ” An effort by several Galion residents to obtain enough valid signatures to get the issue of abolishing the city’s charter that has been in place for 26 years has paid off.
According to city council clerk Michelle Talbott, out of 837 signatures provided to her, 676 were valid and only 267 valid signatures were needed.
The issue is now with the city’s law director Reese Mills, who will present it to council. If approved, it would be placed on the ballot in November.
…Council member Roberta Wade, who is head of the finance committee, said she will have a public meeting with speaker Sandy Buchanan from Ohio Citizens Action of Cleveland to answer questions the residents have regarding issues such as utility rates. ”
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