October 5, 2020 Read More →

AMP contracts signed in 2007 now costing dozens of cities

Michigan Radio:

Four Michigan cities may have made a financial mistake that will last decades.

Hillsdale, Clinton, Marshall, and Coldwater were among dozens of cities in nine states that signed 50-year contracts for electricity from a company called American Municipal Power, or AMP.

That electricity is now far more expensive than what the cities could obtain on the open market, according to a study by David Schlissel of the Institute for Energy Economics and Financial Analysis.

Schlissel says AMP over-promised and under-delivered on the price and timeline for two projects – a new coal-burning plant and a new combined hydroelectric plant. Both cost more and took longer to build than anticipated, and in the case of the hydroelectric plant, its output was dramatically lower than projected, although its performance has improved over time. 

[Tracy Samilton]

More: Study: Four Michigan cities pay too much for electricity after signing 50-year contracts

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