The Paducah Sun has published a revealing interview with Ray McLennan, the former chairman of Paducah Power System, which is buried in debt and high costs tied to the Prairie State Energy Campus.
McLennan concedes in the report by Executive Editor Steve Wilson that the utility’s decision to take a stake in the struggling coal-fired electricity plant was largely speculative but that it had the blessing of industry insiders: “The Paducah Power board didn’t make decisions on its own, McLennan said, and relied heavily on advice from R.W. Beck, one of the nation’s leading energy consultants.”
McLennan also tells Wilson that Paducah Power’s gamble had a “rational basis” although he acknowledge three crucial mistakes:
- “One was making a second, smaller investment in Prairie State when offered the option to buy an extra 10 megawatts of power after another municipality withdrew. PPS did not need the additional power, and the additional buy helped push PPS’ long-term debt to $580 million.”
- “A second mistake was investing $170 million to build a larger, gas-fired peaking plant that can produce 120 megawatts of power but has been scarcely utilized.”
- “A third was Paducah Power’s decision to buy 15 megawatts from an Ohio River hydroelectric project involving dams at Smithland and four other sites. That decision, he said, was driven by anticipation that the General Assembly would soon require municipal utilities to get at least 5 percent of their power from renewable sources. Such a requirement has not come to pass.”
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