Norman McCauley walks with his horses on his farm, which is adjacent to the Prairie State Generating Co. power plant near Marissa, Ill.

LIVELY GROVE, IL — “The new mining activity is causing some disruptions. From a 40-acre field behind his house, Norman McCauley can see and hear the hum of the Prairie State Generating Co. power plant, with its nearly 700-foot-high smokestack and conveyor belts that deliver coal from the adjacent Lively Grove mine, which started producing coal in 2011.

‘It’s ruined this area,’ said Mr. McCauley, 54 years old, who farms beans, wheat and corn. He said he had hoped to buy up surrounding farmland from elderly residents, but instead many of them have sold to companies that developed the project. Other local residents say traffic has disrupted the rural landscape of green wheat fields.

David A. Meyer, chairman of the county board of Washington County, said Peabody Energy, the coal company involved in the project, had tried to mitigate disruptions, and he said the project has given the area a needed boost. ‘These are permanent good-paying jobs, some of them very high-tech,’ he said.”

— Kris Maher, Wall Street Journal

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…The agreement defined confidential information as trade secrets or economic data pertaining to the Prairie State Energy Campus as well as scientific, engineering, technical, commercial, organizational or administrative information.

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.”

— Eric Schelkopf, Kane County Chronicle

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Paul Bender, the city of Cleveland’s new head of public utilities.

CLEVELAND, OH — “At Bender’s swearing-in ceremony last month, Jackson praised him for his range and depth of experience and said Bender will play a critical role in ensuring the future viability of the city’s utilities.

But not everyone is sold on the new director just yet.

Environmentalists say they have yet to see where Bender stands on controversial issues involving Cleveland Public Power. The city is still studying the possibility of building a waste-to-energy plant, which would burn trash to generate electricity. And the utility is snagged in expensive long-term contracts with coal-burning power plants. In one case, a plant was never even built, but the city is on the hook for millions of dollars in stranded costs. The failed plant is at the heart of a pending lawsuit, involving CPP and a consortium of other cities that signed the deal.

Bender said in a recent interview that he has only begun to review CPP’s contracts and energy portfolio. He also deflected questions about the waste-to-energy plant, stating that the mayor is taking the lead on that issue.”

— Leila Atassi, Cleveland Plain Dealer

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“As expected with a new unit, Prairie State has experienced some reliability issues during its first months of operation,” Reeves said. “We are confident that these issues will be remedied and that the plant investment will pay off as a reliable, economical source of energy for many years.”

The final year-end margin was approximately $5.05 million, SIPC Secretary-Treasurer Jamie Scherrer reported.”

— McLeansboro Times-Leader

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AMP has challenged the study done by the Institute for Energy Economics & Financial Analysis, saying it was authored and paid for by anti-coal groups.

…King and Danville Utilities Director Steve Saum say they are not displeased with Prairie State’s per megawatt price. They say the drawbacks have been congestion charges and transmission costs: Power from Prairie State has to cross two grids to get to Southside, in effect crossing two toll booths on the energy superhighway before it reaches Danville.

King and Saum say Prairie State can still pay off, and that if the economy turns around and drives up energy costs, it will still be a good investment. They aren’t unhappy with it now.

‘All things considered, it’s right in line with what we expected and the prices we expected,’ King said.”

— Mary Beth Jackson, GoDanRiver.com

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Hannibal officials are watching developments in Marceline, which has indicated a desire to get out of its Prairie State power supply contract.

HANNIBAL, MO — “Citing high costs, the small, northern Missouri town of Marceline announced last month it wants out of its power contract with the Prairie State Energy Campus. Those developments are being watched closely in Hannibal, which also has a power pact with the coal-fired power plant in Illinois.

‘We recognize Marceline has a real problem,’ said Robert Stevenson, general manager of the Hannibal Board of Public Works. ‘What’s different between them and us is Hannibal bought enough capacity (20 MW) off of that plant to replace a third of its needs. Marceline went out and bought enough of Prairie State to cover its whole load. They bought 100 percent. It was too big of a bite.’

The St. Louis Post-Dispatch reported in March that Marceline, a community of 2,200 residents, is expected to lose almost $1.4 million this year.

At the time, City Manager Luke Lewis was wanting to negotiate an exit with Prairie State but didn’t rule out defaulting on the contract. A default by Marceline wouldn’t have a ripple effect in Hannibal, according to Stevenson.”

— Danny Henley, Hannibal Courier-Post

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CELINA, OH — “Most of Ohio’s municipal utilities are members of American Municipal Power, a Columbus-based company that manages energy purchases. AMP encouraged its members to buy shares in several new power plants, including the Prairie State Energy Campus in southwestern Illinois. The project has suffered mechanical problems and budget overruns. They could contribute to future rate increases in the communities that bought into it, including Galion, Cleveland, Hamilton and dozens of others. Columbus’ and Westerville’s utilities did not buy into the plant.

Celina, which owns a small share of Prairie State, has kept its rates low by carefully managing its expenses and because it has a large industrial base for a city its size, said Mayor Jeffrey Hazel. But he gets more complaints about rates than pats on the back.

‘The majority of people, just by human nature, don’t look outside themselves,’ he said. ‘It would be rare for someone from Celina to go outside the city to see what other people pay.’”

— Dan Gearino, Columbus Dispatch

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…Ohio-based American Municipal Power, which has a 23% interest in the coal-fired plant, and Peabody Energy Plant, the company that led initial efforts to develop the joint power agency-owned project and later sold most of its share, disclosed within the last two months that they have received SEC subpoenas.

The southern Illinois coal-fired plant, which includes a coal plant and adjacent coal mine, has come under fire for construction delays and cost overruns that drove up the price for energy beyond what public utilities had expected to pay when they bought into the project.

Public utilities in Illinois, Indiana, Kentucky, Missouri, and Ohio issued $4.5 billion of debt, up from original projections of $1.8 billion. The bonds are secured payments from more than 200 municipalities that have contracts with the project.”

— Caitlin Devitt, Bond Buyer

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MARCELINE, MO — “While Marceline City Manager Luke Lewis says he and the Marceline City Council still intend to amend the City of Marceline’s budget to reflect current Prairie State revenues and what the City is paying for the four megawatts from Prairie State, he’s dealing with a moving target. During a recent meeting with the Marceline City Manager, he advised that the City of Marceline’s Prairie State expenditures are escalating at such a varying rate so often that he and the Council would have to amend the City budget “every other day.”

In the March 8 edition of the LCL, we noted a discrepancy of $678,753 between what was budgeted for Prairie State in the City of Marceline’s 2013 Budget and what was cited in a letter he submitted to the Marceline City Council and the LCL that we published on February 22. At that rate there will be a significant deficit in the 2013 City of Marceline budget. Since that time, the amount needed by the City ofMarceline to make good on its financial obligation to Prairie State has continued to grow, but Lewis is hesitant to say exactly how much at this time.

However, the Institute for Energy Economics and Financial Analysis (IEEFA) released a report on Prairie State last August that gives some idea about why Prairie State costs have continued to increase well beyond what was originally projected. Entitled The Prairie State Coal Plant: The Reality vs. The Promise, that report cites the rising cost of constructing the Prairie State Energy Campus as a principal driver of the escalating costs that have been passed on to ratepayers in participating municipalities. However, it is important to note that Lewis has assured Marceline’s electricity customers that he will not recover the City’s escalating Prairie State costs by raising their rates.”

— Chris Houston, Linn County Leader

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CLEVELAND — “Ohio’s Attorney General has been asked to investigate ‘potential fraud’ involving a multi-billion dollar coal plant supplying power to Cleveland and scores of cities across Ohio and the Midwest.

The calls for a state probe come on the heels of an exclusive 5 On Your Side investigation in July 2012 that raised serious questions about the plant’s performance and impact to ratepayers.

In a letter to Ohio Attorney General Mike Dewine , Cleveland Councilman Brian J. Cummins, along with three other councilman from Gallion, Painesville and Martinsville, W.Va, are ‘urging’ an investigation into “any potential fraud or misrepresentations” that led municipalities to enter into long-term contracts to invest in the Prairie State Energy Campus in Marissa, Illiniois.

The letter argues that ‘the financial impact of the project is already placing small communities under severe financial distress.’”

— Ron Regan, Newsnet 5

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