Prairie State costs are skyrocketing for participating municipal utilities

September 19, 2010-by Jeanette Sturges in the Naperville Sun. he city’s locked in to a full-requirements contract with the IMEA until 2035. Short of expensive lawsuits, Naperville is tied to IMEA, and thus to Prairie State, for 24 years, beginning June 1, 2011. The smoke stack from the Prairie State Energy Campus towers over farms and farmland in Washington County, IL. (Sid Hastings/For Sun-Times Media)
(Editors Note: Forty municipal utilities in Indiana are faced with the same prospect through the Indiana Municipal Power Agency, including Jasper and Tell City.)

When Naperville bought into the Illinois Municipal Electric Agency in 2007, it bought into coal.

A lot of it.

Just months after Naperville signed on to IMEA, a cooperative of 30 municipalities and rural electric cooperatives, IMEA signed off on its purchase of 15.17 percent of the Prairie State Energy Campus, a 1,600-megawatt, coal-fired supercritical power plant.

Now, as the over-budget burner of fossil fuels rises out of the corn fields near Lively Grove, 40 miles southeast of St. Louis, Naperville is left to wonder whether the deal will deliver on its promise of clean, cheap, reliable energy, and if not, what can be done about it.

At what cost?
“We still think it’s a good deal,” said Mark Curran, director of Naperville’s electric utility. “Everyone wants to concentrate that this is a big lump of money, but you have to look over the whole life cycle of the plant. The cost is going to stay much flatter than where I think the market’s going to go.”
And it is a big lump of money. After construction overruns, the total bill for the plant, its adjacent coal mine, new transmission lines, and a host of other costs, ran 25 percent over budget, topping out at $4.9 billion.

Do the math, accounting for the fact that Naperville makes up about 40 percent of IMEA, and the city’s share comes in just under $300 million, to be paid over the next 24 years.

According to the IMEA and the city, that 25 percent project overrun means Naperville will see about a 3 percent rise in its wholesale electricity costs, which will be passed on to customers.

But that doesn’t factor in the environmental costs of getting energy from coal in the first place, costs that may translate into actual dollars in the future. (MORE)

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