Investing in a massive coal-burning power plant in southern Illinois has saddled some towns with similarly large electricity rates
ILLINOIS- “Across the nation, cities are taking advantage of deals for cheaper electricity made possible by low-cost natural gas. But not in five Chicago suburbs and more than 200 other Midwestern towns that made a big bet on coal. Almost every month, Batavia, Geneva, Naperville, St. Charles and Winnetka are among dozens of municipalities feeling the sting of their decisions to finance the Prairie State Energy Campus in southern Illinois. The promised savings simply have not materialized.
‘Now THAT was expensive,’ a Winnetka village engineer wrote in an email responding to a recent power invoice….
At the time, municipal officials saw Prairie State as a reliable, affordable source of electricity and locked themselves into 28-year contracts with a company formed by Peabody Energy, the nation’s largest coal producer. Peabody ended up with just a 5 percent stake in the plant after shifting most of the costs — and nearly all of the financial risks — to towns as small as 1,200 people….
According to monthly invoices obtained under the Freedom of Information Act, Naperville has been paying a monthly average of $75.04 a megawatt hour this year, for example. By contrast, Chicago pays about $56 a megawatt hour through a deal city officials negotiated after voters approved a proposal for bulk purchasing of electricity, or municipal aggregation. Many other communities have secured even cheaper rates…
‘Given current market conditions and forecasts, there is no question that Prairie State is not turning out to be a good deal for these communities,’ said David Kolata, executive director of the Citizens Utility Board, a nonprofit group created by Illinois lawmakers to represent residential utility customers. ‘They locked themselves into power at a very high price when they could be doing a lot better out on the market.’…
The invoices largely confirm the findings of a study last summer by the Institute for Energy Economic and Financial Analysis, a group dedicated to reducing the nation’s reliance on coal and other nonrenewable sources of electricity….
‘When is somebody going to go back to Peabody and say this is not what you promised?’ said Sandy Buchanan, the institute’s executive director.”