Briefing book

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• April 2015Both agencies see the municipalities that are stuck with high rates for Prairie State electricity most likely continuing to pay those rates. The question is for how long.
• March 2015Fitch takes the deeper, more serious look, peering into the books of 21 participating Ohio communities and finding weakening finances. Moody’s, by contrast, skips the local research and concludes everything is fine. So, stable is the outlook at Moody’s; negative is the view at Fitch.
• February 2015Fitch, much to its credit, holds Prairie State to its original electricity-price estimates, and notes that those estimates have long been vastly exceeded, implying that the customers who are tied into long-term contracts with the plant simply cannot continue to see rates keep going up. Fitch finds that high rates are already draining local cash reserves and hurting municipal credit ratings. Moody’s, to its discredit, concludes that the high cost of Prairie State electricity is competitive, and it takes no note of the deteriorating financial condition of customer cities.
• January 2015Debt documents submitted for review by AMP Ohio, the largest participant in the Prairie State portfolio and the link between Prairie State and many member communities, are also supposed to shed light on Prairie State’s dark finances. But they don’t. The documents put 2014 rates for electricity at $73.66 per megawatt hours and assert that they will drop in 2015 to $71.38 megawatt hour. These numbers are presented by AMP after an almost incomprehensible explanation of how various internal subsidies are being used to depress rates that would otherwise be even farther off the chart than they are now. While it’s clear that the rates Prairie State is charging are not based on the real cost of electricity from the dysfunctional plant, it would take a team of auditors to figure out the full truth behind AMP’s many tangled cross-subsidies.
• December 2014As for the rates being competitive, nothing could be further from the truth. The communities tied to Prairie State — if they weren’t locked into such ill-advised contracts — would be able to get electricity off the open market for about half what they’re paying for Prairie State’s. Prairie State’s rates for electricity are captive, to put it bluntly, not competitive.
• November 2014Moody’s relies nonetheless in its review of the new bond offering on a vague standard of competitiveness that muddies the kind of clear and concrete information investors deserve. Crucial facts that go overlooked include that Prairie State produces electricity at far above market prices and far above the original estimates used to encourage local governments to sign on.
• October 2014Fitch—again to its credit—is worried about shrinking cash reserves of member municipalities now and in the future. Moody’s—again to its discredit—seems to suggest a simplistic way forwarding in which communities presumably cut other services to keep up with electricity-rate increases.
• August 2014
PAINESVILLE – “Painesville City Council members again discussed the arrangement that the city has with a power company that provides access to higher streams of energy during peak times.
• July 2014
Debate surrounds the price negotiated between the city and American Municipal Power Inc. in the power purchase agreement the city entered into in 2007.
• June 2014
• May 2014
• April 2014
• March 2014
• February 2014
• December 2013
Ward 1 Councilman Andrew Flock said at the presentation given by AMP-Ohio that the agreement, which runs 30 years, set the price at roughly $48 per megawatt hour….
The tenor of the meeting was education and unity for the residents of communities footing the AMP bill, and unity among the con stituent communities as they look to confront the issue.
• July 2012
Wade in particular promised an issue forcing the city to refund overcharges would be going on the ballot after the first of the year. Wade indicated the reasons for the proposed ballot issue are intertwined with the wider AMP/Prairie State story; but the specifics have to do with the government of the City of Galion.
• June 2012
This lawsuit would seek to restore to the residents of Galion some $4 million in what Wade claims are overcharged electric rates. In what Wade termed the “money grab of 2009,” the group says that a Power Cost Adjustment (means through which electrical rates are adjusted) grossly overcharged the residents of Galion until 2012. They added that during this period the electrical fund balance went from approximately $3.5 million to $7.5 million, and that this rate adjustment was done in an underhanded fashion.
• May 2012
Wade cited her time as a member of City Council in this era, which was also when the city tried to double sewer and water rates. These measures were carried out in the light of day, and as such were defeated by Wade and other members of council. Wade alleges the PCA was not done in such open circumstances and this is how it got through.
• April 2012
‘We know the PCA overcharged you,’ Wade said, ‘You’re owed a refund for that money you were overcharged, it’s that simple.’…..
• November 2011
Flock is a city council member in Painesville, and AMP customer; Leontis is a professor at Bowling Green State University, and Bowling Green is an AMP customer; and Buchanan is an executive director with the Institute for Energy Economics and Financial Analysis. Flock and Leontis outlined how their respective communities have dealt with similar situations in regard to their power. Buchanan spoke of other constituent communities who have begun to take action against the group.
• September 2010
Of particular encouragement was the story of Marceline, Mo. This city had a mayor that swore, ‘I’m not going to let this destroy our community.’ This mayor was able to work a deal with AMP to settle out of the contract. This apparently was enough to inspire Paducah, Ky, to attempt something similar.
• July 2010
‘If they succeed in making a deal, every other city should make a deal,’ Buchanan said.
• July 2007
The meeting ended with plans for another meeting after the first of the year, tentatively for Jan. 20. Wade reiterated her commitment to the proposed ballot issue regarding the PCA funds, as well as an allusion to ‘other’ ballot initiatives. Wade stated that she has received feedback from the community that all they do is talk. She made it quite clear that the time for action has now come.”
• May 2007
by Gary Ogle & Andrew Walsh,