NEW YORK, NY — The City of Batavia, IL, a participant in the Prairie State coal plant, has used the resources of the Brattle Group, a national consulting firm, to analyze the cost of power from Prairie State compared to the market for the next ten years.
Last month, Batavia canceled its plans to sell all or part of its 55.2 megawatt share in Prairie State, announcing that it had not received any acceptable offers from potential buyers.
City Manager Gary Holm prepared an analysis for the February 19 meeting of the Public Utilities Committee His memo included the following slide comparing the price that Batavia pays the Northern Illinois Municipal Power Authority (NIMPA) as established in the Purchase Power Agreement for Prairie State Energy, with the projected cost of power on the market:
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“The blue line represents a combination of known market forward prices for peak and off-peak
energy and Brattle’s projections for peak and off-peak energy. Peak energy is indexed to natural
gas generation which generally controls during peak times. Off-peak energy is indexed to coal
generation which generally controls during off-peak times.”
The analysis of the slide included the following observation:
“Assuming no increase in Prairie State costs and using Brattle’s future energy projections, the
‘crossover’ is estimated to occur beyond 2024. This means that for the foreseeable future:
- The City is paying more for energy from Prairie State then it could otherwise purchase from the market
- The City is losing money on the sale of any excess power purchased from Prairie State and sold back into the market.”
— Tom Sanzillo, Director of Financial Analysis, Institute for Energy Economics and Financial Analysis