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Costs of buying power from AMP's Prairie State and combined hydro project continue to mount for municipal ratepayers

September 01, 2021
David Schlissel
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Key Findings

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

Both projects came in significantly over budget, were delayed from their original timelines, suffered serious technical problems and carry high debt burdens.

Executive Summary

For example, IEEFA found that Cleveland Public Power (CPP) and its ratepayers had paid at least $106 million more for power from the two projects through the end of 2019 than it would have cost the city to buy the same power from the competitive wholesale PJM markets.

Newly available data covering the period January 2020 through July 2021 show that CPP has now paid $148 million more for power from the two AMP projects during the past nine years than the same capacity and energy would have cost from the PJM markets.

All AMP members participating in either or both of the projects have paid significantly over market prices. Actual amounts vary by city, according to the contracted megawattage for each project.

IEEFA expects the communities will continue to pay millions in unnecessary costs to AMP unless they are able to revise or terminate their contacts.

David Schlissel

David Schlissel is IEEFA’s Director of Resource Planning Analysis. His work focuses primarily on the technical and economic viability of resources being used or being proposed for use in the electric power sector.

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