INDIANAPOLIS, IN — “Peabody proposed the 1600 MW plant in 2001. But they were soon working aggressively with state power agencies, including the Indiana Municipal Power Agency (IMPA), to persuade communities to sign long-term contracts to buy coal-fired electricity from the plant. Today, 217 towns and 17 electric co-ops, most of them in Ohio, Indiana, Illinois and Missouri, have signed on to buy this electricity. Among them are 52 Indiana communities, ranging in size from tiny villages like Advance and Jamestown up to mid-size cities like Richmond and Anderson.
These towns and cities get wholesale power through IMPA and they’re on the hook for the project’s rising costs. In 2004, Peabody said the Prairie State Energy Campus would cost $1.8 billion to build. Estimated costs had skyrocketed to $4.1 billion by 2007 and to $4.9 billion by 2010.
When selling communities on buying electricity from the plant, Peabody Energy and municipal power agencies promised them low-cost electricity for years, starting on day one of commercial operations, Sanzillo said. But the cost of wholesale electricity is over $80 per megawatt hour (MWh), when you take into account the additional payments made earlier this year, the group reported. Prairie State Generating Company said in a statement that it’s $50-$55 per MWh. In any case, the going rate for wholesale electricity in the region is $41 per MWh, according to the report.
— Dan Ferber, NUVO Newsweekly
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NEW YORK, NY — “‘Far from being a low-cost source of energy, the first year cost of power from Prairie State is 40 to 100 percent higher than the current cost of power in the Midwest wholesale markets and is expected to remain higher than market prices for the next 10 to 13 years, if not longer,’ said Tom Sanzillo, the institute’s finance director, in a statement.
This will result in ‘significant fiscal problems’ for the participating communities and higher utility bills for 2.5 million ratepayers, the group said. In addition, hundreds of millions of dollars of bonds were also sold by municipal power agencies for the Prairie State project, including Ohio’s American Municipal Power and the Indiana Municipal Power Agency, according to the group.
A Peabody Energy spokesperson called the report ‘an advocacy piece in the guise of serious research.’”
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INDIANAPOLIS, IN — “The Indiana Municipal Power Agency, which has more than 50 member utilities in Indiana, purchased a 12 percent stake of the plant or approximately 200 megawatt hours. Earlier this year, plant construction delays had consumers paying off bonds for the project before they received any power. The first of two generating units has been operating since June.
Kerwin Olson, executive director of Citizen Action Coalition in Indiana, says Prairie State is a bad investment for Hoosier utility customers.
‘The ratepayers of the 52 municipal utilities throughout Indiana are on the hook for that $741 million and will see their electric bills increase more than they otherwise would, absent this unnecessary and overly expensive project.’”
— Leigh DeNoon, Public News Service Indiana
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52 Indiana cities ‘on the hook’ for $5 billion southern Illinois project
BLOOMINGTON, IN — “‘Information about the delays and costs of the plant has been difficult for citizens and municipal officials to obtain, yet they are carrying virtually all of the financial risk for this plant,’ explained Sandy Buchanan, Executive Director of Ohio Citizen Action. “We are launching this website to provide local officials, community residents and the media with copies of important documents and news coverage.’
The Indiana Municipal Power Agency (IMPA) owns 12.64 percent of the now $4.9 billion project.
In 2004, the Indiana Utility Regulatory Commission (IURC) gave their approval to IMPA to issue $850 million in debt to finance the Prairie State project, as well as three other projects. Due to massive cost overruns at the Prairie State project, IMPA came back to the IURC in late 2009 asking for an additional $122 million to help complete the troubled coal-fired power plant. The IURC approved the request in July of 2010, which puts IMPA’s total stake in the project at a staggering $740 million for 200 megawatts of power.”
— Steven Higgs, The Bloomington Alternative
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- PSEC Commitment: 200 MW
- Participant Communities: 52 Member Utilities
- Power Purchase Agreement: Take-and-Pay
- Bonds Outstanding: $757 Million
IMPA was created in 1980 pursuant to the provisions of the IMPA act by contract among its then member municipalities, for the purpose of undertaking the planning financing, ownership and operation of projects to supply electric power and energy for the present and future needs of its members. IMPA has entered into separate power sales contracts and one power supply agreement to meet the power and energy requirements of its present 52 members. IMPA has further entered into a Power Sales Contract with the Ohio Village of Blanchester, its one customer. Raj Rao has served as President of IMPA since 1986 and is responsible for the development of IMPA and its strategies and programs pursuant to policies established by the Board.
The Major Members of the Utility based on 2009 revenues are the Indiana cities of Richmond (14.6%), Anderson (14.2%), Crawfordsville (6.4%), Frankfort (6.0%), Jasper (5.9%), and Greenfield (5.1%). The Major Members provided retail electric service to approximately 91,000 customers and received approximately $249 million in revenue from their customers.
Complete list of member communities