March 24, 2015 Read More →

One town sues, one puts electric system up for sale as high power costs of Prairie State plant take their toll

hermannTwo stories in the news today reflect the economic struggles of towns who have signed long-term power contracts for electricity from the controversial Prairie State coal plant in Southern Illinois. The plant, originally developed by Peabody Energy, is now 95% owned by municipal power systems covering eight states. The Hermann Advertiser Courier reports that the small town of Hermann, MO, population 2,400, has gone to court to withdraw from the Missouri Joint Municipal Electric Commission (MJMEUC) due to the high costs of electricity. The law firm of Curtis, Heinz, Garrett and O’Keefe, who also represented Marceline, MO in its successful bid in 2013 to cancel its contract for the Prairie State plant , filed the suit in Gasconade County Circuit Court. The then-city manager of Marceline, Luke Lewis, declared the plant a “toxic asset.”

And in Danville, VA, 830 miles away from Hermann, the Register Bee reports that several private utilities are expressing interest in purchasing the city’s municipal electric system. Denise Thibodeau reports that representatives of AEP/Appalachian Power, Dominion Virginia Power, Mecklenburg Electric Cooperative, Duke Energy and Central Virginia Electric Cooperative attended an informational meeting on the possible sale.

Danville, population 43,000, made a big bet on the long-term power contract for the Prairie State plant, purchasing 49.76 megawatts of electricity from the plant, through its membership in American Municipal Power (AMP). Danville owns the most shares of the plant of any AMP community, and was also the largest participant in AMP’s cancelled Meigs County plant.

Excerpts from the story:

  • “Jason Grey, interim director of utilities, told the group the book value of the utility is $180 million and, despite drops in population in recent years ‘our energy consumption has remained the same.’”
  • “City Manager Joe King said he expects a recommendation from the Electric Services Steering Committee — a committee comprised of commissioners and members of Danville City Council — when it finishes its assessment of the utility’s strengths, weaknesses and possible solutions in April.”
  • “King also warned that a sale would not be a quick option. It could take two years to free the utility of contracts for power supply and even longer to get permission from the State Corporation Commission to approve the transfer — a comment that drew smiles from attendees familiar with how long most electric-related projects take.”

Full article on Hermann.

Full article on Danville.

 

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