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Higher bills blamed on coal plant

Rock Falls residents pay more than surrounding communities

Published: Friday, Sept. 13, 2013 1:15 a.m. CDT • Updated: Friday, Sept. 13, 2013 4:09 a.m. CDT

ROCK FALLS – A new coal-fired power plant in southern Illinois is being blamed for higher electricity prices in towns with municipal utilities, including Rock Falls.

One group says the plant could mean higher electric bills for a decade or more. 

Less than a year ago, the Prairie State plant opened in Marissa, which supplies power to municipal utilities in Midwestern states. 

This week, the Cleveland-based Institute for Energy Economics and Financial Analysis sent out a piece to newspapers criticizing the plant. 

According to the institute, the plant’s construction costs were $1 billion over budget. 

“Struggling Midwestern communities are now being hit with high costs, which have to be passed along to residents and small businesses or absorbed by strapped city budgets,” the group said in its piece. 

The plant’s performance is far less than expected, the institute said. It had been budgeted to run an average of 82 percent of the time, but it has averaged 62 percent so far, the group said. 

Both of the plant’s units are set to be shut down for extended outages this fall and winter because of design and construction deficiencies, the institute said. 

“The plant’s purported advantage – that it is next door to the coal mine that feeds it – may actually be the source of some of its problems, since the coal appears to be poor quality and is not cleaned for impurities before entering the plant,” the institute said. 

The institute aims to reduce dependence on coal and other non-renewable energy sources.

Rock Falls, which gets its power through the Illinois Municipal Electric Agency, is accustomed to lower prices than surrounding ComEd territory.

In fact, the town’s economic development group still advertises on its website that Rock Falls’ electric rates are “significantly lower” than ComEd’s “under most circumstances.” 

Earlier this year, Sauk Valley Media, which compared power bills between the two towns, found that a Rock Falls resident spent nearly 30 percent more than a Sterling resident for about 900 kilowatts of electricity in a month. 

Alderman Dave Hand, chairman of the Electric Committee, said he understands that the rates will level off in a couple of years, then drop below ComEd’s.

Phillip “Doc” Mueller, a spokesman for the Illinois Municipal Electric Agency, said his group takes the long view, which benefits members such as Rock Falls. Natural gas prices dropped, he said, because the nation endured the longest recession in its history.  

“We responded to an earlier report by the institute a year ago,” Mueller said. “Their general theme is that we shouldn’t invest in power plants and that we should buy off the market. That’s totally irresponsible. Natural gas will not be at this level for the next 30 years.”

The electric agency, he said, believes a diversified portfolio is far better for its members. And he said it’s unfair to look at a power plant’s performance in the first year and project that into the future. 

David Schlissel, the institute’s director of resource planning analysis, said his organization’s assessment shows that Prairie State’s prices for power will exceed the market for 10 years, perhaps longer.

“As long as the price of gas is low and there are more renewables, the price of power stays low, significantly lower than the price at Prairie State,” he said.

Peabody Energy, which led the Prairie State project, questioned the institute’s claims.

“There are some real problems with these claims, and we would love a chance to respond,” said Meg Gallagher, a Peabody spokeswoman.

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