Report: Coal Plant Fails to Deliver; Prairie State Promised a Cheap and Stable Power Source to Towns, but Delays and Overruns Have Driven Up Costs; BUSINESS
Tomich, Jeffrey, St Louis Post-Dispatch (MO)
Cities that agreed to buy power from the Prairie State coal plant in southwestern Illinois are paying higher prices than promised by the plant's developer and will continue to pay above-market rates for electricity for the next decade, according to a report issued Wednesday by the Institute for Energy Economics and Financial Analysis.
The group, which does financial analysis for environmental groups and has previously challenged coal plants in Ohio and Texas, estimates that the municipalities and electric cooperatives in eight states in the Midwest and Mid-Atlantic are paying 40 percent to 100 percent more for power in the plant's first year than prices cited in their long-term contracts.
Tom Sanzillo, the lead author of the report, said the plant hadn't been the provider of low-cost, stable source of electricity it was supposed to be. "None of those promises are being kept by the Peabody-Prairie State project to date," he said in a conference call with reporters Wednesday morning.
The report cites cost overruns and delays that drove the plant's ultimate price tag to $5 billion, double what was estimated when the plant was conceived by St. Louis-based Peabody Energy Corp. a decade ago.
Prairie State spokeswoman Ashlie Keener Kuehn disputed the report's thesis and said the plant remained a cost-effective source of energy for cities and cooperatives that signed on years ago. "While some external factors have changed since the 2008 national economic collapse, the plant's viability hasn't," she said. …