Jan. 21, 2016, CLEVELAND (IEEFA) — Peabody Energy’s announcement today that it is selling its remaining stake in the ill-conceived Prairie State Energy Campus in southern Illinois is the latest indication that the project has failed.
“Peabody’s decision to sell its share of the Prairie State plant for roughly 20 percent of its original value is the final insult to the ratepayers in 200 communities who are stuck for 40 years now with paying sky-high prices for power from this plant,” said Sandy Buchanan, executive director of the Institute for Energy Economics and Financial Analysis (IEEFA). “The question now: Are these 200 communities, saddled with $4.75 billion in bond indebtedness, paying for something worth approximately $1 billion?”
Prairie State Energy Campus, built as a plant to burn low-grade coal from a nearby Peabody mine, has underperformed consistently since it went on line in 2012 and has produced electricity at costs that exceed market prices.
The plant was marketed and sold as a low-cost electricity source to scores of cities and towns across the Midwest and parts of the South. Owners now include municipalities in Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio, and Virginia (map here).
The arrangement has drawn legal action from Batavia, Ill., and Hermann, Mo., and has come under harsh public scrutiny in Paducah, Ky.
IEEFA has published a number of reports and analysis on Prairie State, including one last year that explained how its failure “can be documented year by year in two ways: by its capacity-factor performance and by its disastrous record in living up to its promise of providing low-cost electricity.”
IEEFA has also called for investment banks, law firms and bond brokerages that participated in the many municipal deals involving the plant to now help shoulder the burdens it has imposed on its many ratepayers.
Peabody is the largest private coal company in the world.
____________________
Media: Karl Cates 917-439-8225 [email protected]
About IEEFA: IEEFA conducts research and analyses on financial and economic issues related to energy and the environment. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy and to reduce dependence on coal and other non-renewable energy resources.
###
