MIDWEST Ill. power plant at center of rate fights

Associated Press

COLUMBUS, OHIO

High electric bills and environmental skepticism in towns across the Midwest are causing customers to wonder if they’ve been duped as power suppliers work to recoup investments in a financially troubled Illinois generating plant and coal mine.

Rate increases and equipment breakdowns were the opposite of what dozens of municipalities that invested in the Prairie State Energy Campus were promised: low-cost, reliable energy for decades to come.

Customers in Galion, Ohio, have threatened ballot action. They want the city to repay overcharges they allege were amassed to mask high electricity costs from the Washington County, Ill., project.

In Batavia, Ill., customers filed class-action litigation alleging city-paid consultants misrepresented financial risks associated with the complex, constructed by coal producer Peabody Energy.

The municipal power provider in Paducah, Ky., contemplated bankruptcy after its customers blamed its decision to invest in Prairie State for some of the state’s highest electricity rates.

When Prairie State’s 1,600-megawatt generating operation, mine and landfill went on line in 2012, its development had cost $4.9 billion — more than twice the original estimate. That forced rate hikes and fees called power adjustments in many of the 217 municipalities and 17 electric cooperatives that invested in the project.

Prairie State’s defenders say it was expensive because it’s one of the country’s cleanest, most-efficient power plants.

Many of the 68 Ohio municipalities that belong to the American Municipal Power cooperative signed stringent “take or pay” contracts that obligate investors to pay for their full contracted share of power — whether or not they receive it — for 50 years. Many customers now feel duped.