David Zoeller of the Paducah Sun reported this weekend that new Paducah Power System general manager Gary Zheng is seeking buyers for the system’s excess power.
“Paducah Power’s rates are the highest in the state due mainly to the past poor performance of the Prairie State Energy Campus, the utility’s chief supplier of power, and the utility’s large debt as an owner/investor in the Illinois coal-fired power plant project,” Zoeller explains.
The previous leadership of the power system resigned last fall and an interim director, Marc Crisson, was hired. The board has enacted a rate recovery plan and refinanced some of the debt. Zheng took over in February and told the Sun he has put 5,000 miles on his car, mostly going to meetings in an attempt to find a buyer for the system’s excess capacity.
- “Two things that could improve market conditions would be a rise in natural gas prices and new EPA rules that could shutter older, existing coal plants that have relatively lower costs, Zheng said.”
- “In a recent article on Prairie State, IEEFA authors Tom Sanzillo and David Schlissel suggest pursuing a workout agreement with Prairie State bondholders. ‘The communities that were talked into taking a stake in Prairie State took a chance, to be sure, but so did the other players. Public power projects, by design, have many stakeholders so that the risk is distributed equitably. That principle needs to be put into action here. Indeed, the way forward in communities hobbled by Prairie State is to implement a debt relief plan that requires all parties to contribute and that offers an honest assessment of Prairie State’s operational viability.’”
- “Paducah Power officials, however, believe Prairie State is beginning to operate more efficiently. They point to a recent change in the plant’s management, and support for Prairie State among Wall Street and rating agencies, as a reason for their optimism. ‘My view is Prairie State is not necessarily the problem,’ Zheng said. ‘The problem is we have probably have more than twice the capacity we need.'”
Full article (subscription required):