Coal plant woes likely to boost Naperville electric cost
By Susan Frick Carlman firstname.lastname@example.org September 15, 2012 10:58PM
Updated: October 17, 2012 6:04AM
Authors of a report released recently suggest the energy derived in Naperville from an enormous new downstate power plant will be far costlier and less efficient than supporters initially predicted, but local officials aren’t too worried.
In “The Prairie State Coal Plant: The Reality vs. the Promise,” researchers say costs for the first year of power out of the massive facility southeast of St. Louis are sharply higher than those in traditional wholesale markets that serve the Midwest, with no real relief in sight.
Released recently, the report was generated by the Institute for Energy Economics and Financial Analysis. The nonprofit is an affiliate of the Power Plant Finance Project, which focuses on research on new coal plants.
The report’s authors predict that it will be at least 25 years before Prairie State will provide its member communities with substantial savings. Naperville began buying energy from the plant as part of a cooperative in June 2011, under a contract that runs through September 2035.
Mark Curran, director of the electric division of Naperville’s public utility, doesn’t argue with the assertion that construction cost overruns at the 1,600-megawatt, coal-fired electrical power station and coal mine have added to the likely expense for consumers down the line. But he disputes forecasts from plant opponents that the facility’s complications will mean as much as twice the original cost for Naperville and five other Illinois municipalities that several years ago inked a deal to buy coal-derived energy through the Illinois Municipal Electric Agency.
“That’s not going to happen. It’s just one resource in our whole portfolio,” Curran said, adding that the Prairie State commitment is only 25 percent of the utilities’ investment. “That’s way, way out there.”
Kady McFadden disagrees. The St. Charles resident, organizing representative for the Sierra Club’s Illinois chapter, cited significant cost increases since the city partnered with Peabody Energy to help fund the power plant.
“The main concern is what Peabody promised to the city of Naperville when they came to Naperville many years ago and convinced the city to sign a contract with them,” McFadden said. “Peabody promised prices at $40 per kilowatt hour, and it’s looking like prices across the country are higher than that.”
Also problematic, she said, is that the plant was scheduled to be running in January but it didn’t go online until June, and a portion remains shut down.
Curran said forces beyond anyone’s control have shifted the landscape since the city joined the Illinois Municipal Electric Agency in 2007. When Naperville became the cooperative’s largest member, he said, no one knew the nation’s economic recovery would be so slow. The demand for electricity also has dipped, increasing the chance of prices going up.
Curran said he expects to soon have a better grasp of the degree to which Prairie State’s glitches will affect Naperville’s bottom line.
“I would need them to run some analysis to help me on that ... but it does put a little upward pressure on it,” he said.
While the rate study conducted by the city last year found a need to hike customers’ rates by 2 percent annually in 2014-2016, Curran said the increase may wind up being more than that, but nothing close to the study’s dire forecast.
He expressed no regrets over urging the city’s investment in Prairie State five years ago.
“At the time it was definitely a good call,” he said. “And I still think it was.”