Naperville and Batavia, ready to boost rates, question Prairie State promise of cheap, reliable power
By Michael Hawthorne, Chicago Tribune- “When Naperville and Batavia bought shares of a new coal-fired power plant, Linda Sommer was one of the few people in the two suburbs who challenged the idea that it would guarantee cheap, reliable electricity for years to come.Seven years later, the number of residents, business leaders and elected officials questioning the deal is growing. Instead of the promised savings, both suburbs are moving this month to boost electricity rates to cover higher-than-expected costs to operate the Prairie State Energy Campus and help pay off municipal bonds that bankrolled its construction.
In Batavia, the financial situation is so dire that officials are considering a sales tax increase in addition to charging residents and businesses more for electricity….
‘There is no evidence the price of power from Prairie State is going to go down,’ said David Schlissel, an analyst for the Institute for Energy Economic and Financial Analysis, a nonprofit group dedicated to reducing the nation’s reliance on coal and other nonrenewable sources of electricity.
‘The real question is whether these cost increases being passed on to communities are ever going to stop.’”
Full IEEFA Prairie State report
BATAVIA – “Aldermen in Batavia got an earful this week about the city’s investment in a coal power plant and the impact it will have on residential electric bills.
Residents packed the City Council chambers to bring their concerns about the city’s decision to invest in the Prairie State Energy campus in downstate Illinois, and a proposed 10 percent rate hike on electricity bills….
Resident Betsy Zinser said the city needs to move toward ‘full disclosure’ about Prairie State’s operating and financial performances.
‘You all have signed confidentiality agreements, yet this secrecy harms us,’ she said.”
By Linda Girardi, Sun-Times Media, The Beacon-News
View- City of Batavia Electric Utility, “Prairie State and Rate Discussion,” presentation, February 24, 2014 (PDF)
NAPERVILLE – “Naperville residents are likely to see their electric rates spike 6 percent this spring instead of the 2 percent they expected….
Naperville purchases power from the Illinois Municipal Electric Agency, of which it is a member along with 31 other municipalities and a co-op.
City Manager Doug Krieger said Naperville is paying more for power than anticipated due to numerous factors including market volatility, unexpected trends in the residents’ electrical usage and government regulation.
There also was a $1 billion cost overrun in the construction of one of the IMEA’s investments, the Prairie State Energy Campus in southern Illinois…
‘I’m pretty convinced … that there’s been mismanagement in IMEA and I think they could have done a much better job controlling costs of Prairie State,’ [Councilman Bob Fieseler] said. ‘I think they were responsible for delivering data to us that went into our rate study that didn’t hold up.’”
By Melissa Jenco and Gary Gibula, Chicago Tribune
“As Batavia officials consider raising electricity rates by as much as 16 percent, people attending an information session Monday night asked how in the heck the town got in this situation.
The special joint committees-of-the-whole meeting was designed to answer such questions, particularly how its investment in the new Prairie State Energy Campus is the driver behind the cost increase….
And the cost of building the plant went from an original estimate of $2.9 billion for one kind of plant. to about $5 billion…
Betsy Thelin Zinsser, a resident who has been studying the matter for several years, urged the council to make more information public about Prairie State and the city’s electricity purchases and sales. All the aldermen have signed confidentiality agreements about some details of negotiations and strategies. “We really need to move toward full disclosure about what is happening at Prairie State. This secrecy harms us. The secrecy helps Peabody and Prairie State and allows Peabody to tell a false success story that gives them strength in our state legislature,” Zinsser said.”
By Susan Sarkauskas, Daily Herald
BOWLING GREEN – “A group of Bowling Green residents continued to raise questions Monday about the 2008 decision of the Bowling Green Board of Public Utilities decision to be a part of the Prairie States coaled-fired power plant in southwest Illinois.
Individuals expressed concerns about the cost of the project, how it could affect the city and its power customers, suggested the city had been misled by Peabody Energy and American Municipal Power and promoted more use of wind and solar power, which city officials pointed out is more expensive than the Prairie States power.
South Main resident Joe DeMare noted that the cost of power from the wind turbines at the landfill will drop to $20 a megawatt when the debt is paid off in 2015. He wondered why the city has not done more wind projects and pursued solar projects….
By Sentinel-Tribune Staff, Sentinel-Tribune
BATAVIA – “Residents could see their electric rates increase by at least 10 percent starting in May.
Batavia Public Works Director Gary Holm has told aldermen that additional revenues would be needed to account for increased purchase power costs and the depletion of rate stabilization reserves.
In 2007, the Northern Illinois Municipal Power Agency, of which Batavia is a member, agreed to a long-term power contract to purchase electricity from the Prairie State Energy Campus in downstate Illinois. City officials said there were higher than anticipated costs related to the construction of the plant.
… Holm said for the period from 2010 to 2013, purchase power costs have increased a total of $7 million, or about 30 percent. Residents would see a 10 percent rate increase in their electric bills if aldermen approve an additional half-percent home rule sales tax that could be allocated each year towards rate relief….
Aldermen are set to first discuss the issue at their Feb. 18 Joint Committee of the Whole meeting.The Institute for Energy Economics and Financial Analysis in August 2012 issued a report criticizing the Prairie State Energy Campus with charging more for power than promised.”
By Eric Schelkopf, Kane County Chronical
Full Prairie State report
BATAVIA- “The Batavia City Council is considering raising the city’s sales tax rate to help pay for the electricity it buys.
The council will discuss the matter at its joint committees of the whole meeting at 7:30 p.m. Tuesday at the Batavia Government Center, 100 N. Island Ave.
According to a memo from city administrator Bill McGrath, raising the sales tax one-half cent per $1 spent would raise about $1.5 million annually. Raising the tax would still mean the city would have to increase electricity rates 10 percent this spring. Without the added sales tax, the staff is recommending a 16 percent rate hike.
If approved, the new sales tax would rise to 8 percent on general merchandise and 2.25 percent on food and drugs.”
By Susan Sarkauskas, Daily Herald
ILLINOIS- “…If you live in Chatham, belong to Auburn’s Rural Electric Convenience Co-op or the Shelby Electric co-op, you received a letter last year informing you of a large rate increase. The letter may not have told you why. They were among more than 200 municipalities and co-ops forced to raise rates up to 30 percent because they invested in Peabody’s Prairie State Coal Plant near Marissa, Ill.
When Peabody found it difficult to find private investors for Prairie State, they targeted co-ops and small towns with promises of clean, low-cost energy. Then construction costs rose higher than expected and so did the price of power generated by the plant. Some towns are now suing Peabody to escape even larger rate increases.
Why was it easy for Peabody to convince so many public officials that Prairie State would be a secure investment for low-cost energy? One reason may be the tax dollars spent by the Office of Coal Development to convince everyone it’s true. The office spent years promoting Prairie State to public officials and subsidized its construction. Now Peabody will reap the profits while many towns struggle to pick up the tab.”
By Will Reynolds, Illinois Times