"APOLOGIZE" one republic

I know our local paper the News-Herald will never print a story like this; either because they don't want to... or they don't want to upset some people. Having a good relationship with city officials or politicians might mean more to some editors then informing the public of what is really going on in their communities. That may explain the paper leading with "chicken stories" when reporting about Painesville Council Meetings.
So I will reprint the AMP-OHIO news article from the Martinsville Bulletin in it's entirety here. You will at least see what other communities have learned.
As of today's date only one councilman has come out and apologized for his part in this debacle, Paul Hach and he should be commended for his honesty. Now don't expect anyone else to publicly apologize.. he was one of only six that voted for this, along with people within the administration that promoted this contract. The sad part of this story is that Martinsville had a smaller stake in the project than Painesville has and also went into the Freemont Energy Plant where AMP-OHIO tagged on another 35 million to the cost of Freemont so the stranded costs at AMPGS weren't so high.

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http://www.martinsvillebulletin.com/article.cfm?ID=31836


AMP debt $826,000

Council learns amount Tuesday
Wednesday, January 25, 2012

By BULLETIN STAFF REPORTS -

Martinsville’s share of costs for a power plant on which construction was halted more than two years ago is $826,102, Martinsville City Council learned Tuesday.


The city’s full “stranded cost” — the cost incurred to develop a coal-fired power plant in Meigs County, Ohio, called the AMP Generating Station (AMPGS) project — is $1,305,506, according to information from AMP President/CEO Marc S. Gerken that was given to council on Tuesday.

However, that amount was reduced by $479,404 thanks to a development fee, leaving the city with the $826,102 bill, the information shows.

Martinsville buys wholesale power through AMP, a nonprofit organization, and then resells and distributes that power to city electric department customers.

In November 2009, AMP quit developing the AMPGS project because contractors’ cost estimates had increased by 37 percent.

AMP decided to redesign the Meigs County site so it could generate power there with natural gas, then abandoned that idea after realizing it would cost less to buy another power plant for which construction was nearly finished.

That plant, the Fremont Energy Center, also in Ohio, recently started generating power on a commercial basis. Last summer, Martinsville entered a 35-year contract with AMP to buy power produced at the Fremont plant.

As an AMP member that was to take part in AMPGS, Martinsville is obligated to pay part of the stranded costs that AMP incurred in developing the Meigs County plant, according to city Utilities Director Dennis Bowles.

However, the AMP Board added a development fee of about $35 million to the Fremont Energy Center. That fee has been used to reduce the development costs for the AMPGS project for AMP members who took part in both the Meigs County and Fremont projects, such as Martinsville. That resulted in the $479,404 reduction in the city’s cost.

Not included in the stranded costs are further net proceeds from litigation on the halted project, further settlements with contractors and/or equipment suppliers and disposition (or reuse) of the AMPGS site in Meigs County, according to Bowles.

Gerken’s information states the city has two choices:

• Make a lump sum payment of $826,102.

• Make a monthly payment for any period up to 15 years.

If the city elects to pay the $826,102 over 15 years, assuming a 3.0 percent interest rate, the annual payment would be about $69,200, according to Gerken’s information. Based on AMP’s current load forecast for the city, this would equate to 35 cents per megawatt hour, the average customer usage, added to the power supply invoice, the information states.

Bowles presented three other payment options to city council, each with different terms. No decision is needed at this time, he added.

Council received the information but made no decision. It will take up the matter during its next meeting.

The city has not paid any money toward the stranded cost, and it has not budgeted any funds in fiscal 2012 to begin paying them.

The total stranded cost when the project was terminated was about $145 million, Bowles said Tuesday. Savings were realized through negotiations with contractors and suppliers, he said.

A complete accounting of the total amount due AMP will not be available until litigation is complete, Bowles added.


With decisions like this being made, no Painesville resident can be left wondering why there is rust in their water, water in their basement and chuckholes in their streets.