and that cost increase is exclusive of the negative externalities paid by the People's Commons!

Peabody Energy is a must for mapper! They are so heavily entrenched in our government that they probably enjoy the most thorough “regulatory takeover” of any firm in the country next to GE and Wall Street []

CPP Customers Already on the Hook for $19 Million, 2.5 Million Households Across Eight States Overpaying for Electricity

Cleveland, Ohio (September 19, 2012) – Congressman Kucinich (D-OH) is calling for a federal investigation into a series of deals surrounding investments in the Prairie State Energy Campus, a new coal power plant and related facilities in southern Illinois. A new report was released detailing how ratepayers in 217 municipalities across the Midwest, including Cleveland Public Power, will bear the exorbitant cost of deals that were designed to make the municipalities bear the risk of a new multibillion dollar coal plant.

In order to build a new coal plant in southern Illinois, the Peabody Energy Corporation looked past private investment because new plants are a known financial risk. Instead, they turned to regional power agencies like American Municipal Power, who, along with their member municipal agencies like Cleveland Public power, could fund them with bonds. Nine regional power agencies were convinced to become partial owners. The deals specified that the municipalities could get stuck funding the plant even if it never produced electricity.

Now, after foreseeable and preventable cost overruns and subpar performance, ratepayers are forced to buy electricity from the coal plant, known as the Prairie State Generating Company (PSGC) even though the cost of energy on the open market is much cheaper. Cleveland Public Power alone is now expected to pay at least $19 million more than if they had not invested in it. Congressman Kucinich is demanding an investigation from the Federal Energy Regulatory Commission (FERC) to protect the ratepayers from the mistakes of Peabody Energy Corporation and the regional power agencies.

Rep. Kucinich has asked FERC to step in to investigate “any and all agreements between the owners of the Prairie State Generating Company (PSGC), such as American Municipal Power (AMP), and the owners’ member municipalities such as Cleveland Public Power.”

“[T]here remain unaddressed fundamental problems with the financial stability and the long-term reliability of the plant. There are further questions about whether the electric rates being charged consumers are fair and reasonable,” wrote Kucinich… “The cost increases were mostly foreseeable and preventable had the sellers or buyers provided full disclosures and/or done their due diligence. It is likely that the financial weaknesses of the proposed plant were well known to Peabody and PSGC as it developed the project and then sold to state and local governments.”

“[I]t was widely known that new coal plants were a bad financial risk. Peabody and AMP both canceled plans to build other coal plants because of rising costs between 2004 and the present. The cost … rose from $1.7 billion to its current price of $4.9 billion during this period. PSGC rejected warnings from government financial officers, consulters and others about the rising costs. … Peabody’s poor management of the mine is driving up costs…”

“I am requesting that FERC conduct a full investigation of the Prairie State energy deal, and related transactions that are subject to FERC’s jurisdiction.”


telliottmbamsc's picture
telliottmbamsc 3 years 35 weeks ago

Washington D.C. (September 20, 2012) – Congressman Dennis Kucinich (D-OH) today took to the House Floor to defend 2.5 million ratepayers in 217 communities across the Midwest who are overpaying for electricity thanks to bad deal with the Peabody Energy Corporation.

Peabody Energy Corporation convinced nine regional power agencies to become partial owners of a new coal plant in southern Illinois. The deals specified that the municipalities could get stuck funding the plant even if it never produced electricity. After foreseeable and preventable cost overruns and subpar performance, ratepayers are now forced to buy electricity from the coal plant even though the cost of energy on the open market is much cheaper.

See video here.

“Did Peabody Energy Company deliberately unload a bad investment on public power organizations serving 217 cities and villages across the Midwest? Congress must find out because Peabody Energy lured public power organizations into contracts that force municipal utilities to pay up to twice the market rate for electricity.

“At a time when private funding could not be had for new coal powered utilities, Peabody Energy unloaded 95% of its investment onto public power customers in what became an almost triple cost overrun, a coalmine that lasts 22 years instead of the 30 years promised, and an ashfill that was supposed to last 23 years and will last only 12-14 years.

“The contract which municipals are tied into forces them to pay for power 42% above the market rate, whether the plant is producing energy or not. Billions of dollars were issued for bond financing for the project and utility customers are vulnerable to huge costs for debt retirement. Wall Street wouldn’t invest in the project, so Peabody went to Main Street, and now millions of public power customers will pay sky high electric rates...”

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