October 31, 2017 Read More →

In Prairie State Settlement, AMP to Refund $67 Million

The Bond Buyer:

Ohio-based American Municipal Power Inc. says it has resolved a Securities and Exchange Commission probe triggered by the troubles of the coal-fired Prairie State Energy project in Illinois.

The resolution was disclosed in an offering statement for the refunding of up to $67 million of debt tied to the project.

Proceeds will refund debt sold in 2008 and 2009 to finance AMP’s share in the campus. The refunding will lower debt service requirements over the next five years to better position the project cost structure in relation to participant billings.

The Institute for Energy Economics and Financial Analysis, an environmental group that promotes renewable sources of energy, said that even after the refinancing of Prairie State bonds, the cities and towns throughout the Midwest that signed contracts to purchase power from the Prairie State plant are paying almost twice the price for power sold on the energy markets.

“Some are finding themselves in a position where they are using up reserves or can’t provide money from the electric funds to support their general revenue funds,” executive director of the IEFFA Sandy Buchanan said. “For example, IEEFA found that in 2016 the city of Galion, Ohio paid $2.3 million more for power from Prairie State than it would have paid had it purchased power through the wholesale market. Even with a series of bond refinances and other measures aimed at mitigating the city’s participation in the plant, the Galion Electric Fund has used up a sizeable portion of its reserves, and is now considering whether it needs to raise electric rates.”

More ($): No SEC action as probe into AMP’s Prairie State bonds concludes

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