IEEFA U.S.: Municipal ratepayers face mounting costs from costly American Municipal Power projects

Gap between costs from Prairie State, Combined Hydro Project and market prices continues to grow

September 9, 2021 (IEEFA)—Newly available data shows American Municipal Power’s (AMP) Prairie State and Combined Hydro Project have caused costs to continue climbing for municipal ratepayers, according to an analysis by the Institute for Energy Economics and Financial Analysis (IEEFA). 

Data covering January 2020 through July 2021 showed that Cleveland Public Power (CPP) and its ratepayers have paid $148 million more for power from the two AMP projects during the past nine years than the same capacity would have cost from competitive PJM markets. The figure is an increase from IEEFA’s September 2020 analysis, which showed that CPP and ratepayers paid $106 million extra.

“It’s unfortunate that ratepayers are carrying the cost burden of these projects,” said David Schlissel, IEEFA’s director of resource planning analysis. “The projects were significantly over budget, delayed and suffered serious technical problems. But the consequences will continue to be felt by ratepayers.”

In the previous analysis from September 2020, IEEFA found the 50-year “take-or-pay” contracts signed by Cleveland and other AMP members for power from the Prairie State coal-fired power plant and Combined Hydro Project on the Ohio River had become financial disasters for AMP-member communities and their ratepayers.

“All AMP members participating in either or both of the projects have paid significantly over market prices,” said Schlissel. “It doesn’t appear that this will change anytime soon.”

IEEFA expects communities tied to the AMP projects to continue to pay millions of dollars in unnecessary costs unless they are able to revise or terminate their contracts.

Full report: Costs of Buying Power from AMP’s Prairie State and Combined Hydro Project Continue to Mount for Municipal Ratepayers

 

Author Contact:

David Schlissel ([email protected]) is IEEFA’s director of resource planning analysis.

Media Contact: 

Muhamed Sulejmanagic ([email protected]), +1 (313) 246-4547

 

About IEEFA: The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. IEEFA’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. 

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