"RUNAWAY" del shannon

I found this interesting newspaper article over the weekend. Along with the failed Meigs County – AMP – OHIO deal, it seems we also have something called Prairie State. Read the article… if this keeps up, Painesville’s electric rates will soon be higher than First Energy's. Funny how municipal power plants can't show a profit yet have all the same pitfalls as a for profit power company. This should be another wake-up call to our city manager as well as many in the administration to cut all ties with AMP-OHIO. I lay the blame for all of this at the city manager’s feet for recommending these deals with AMP-OHIO. Wonder what their losses are? (Oh yeah, slipped my mind – they’re a non-profit and don’t have to worry about showing a profit) In case you are wondering, Painesville’s future power is 18% share of peak demand… almost 10,000 MW. Enjoy!

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Cities on hook for power plant’s costs

By Dan Gearino


The Columbus Dispatch Sunday April 29, 2012 10:33 AM


The coal-fired Prairie State power plant in Illinois is over budget and still not ready to produce electricity for the 60 Ohio cities that invested in it.

Electricity customers in Galion are part-owners of a $5 billion power plant that is behind schedule and might lead to years of high utility bills.

The city of about 11,000, about 60 miles north of Columbus, is one of many in Ohio whose city-owned electric companies have chosen to invest in the Prairie State Energy Campus, a coal-fired power plant being built in southwestern Illinois.

Among the other investors: Cleveland, Bowling Green, Hamilton, Jackson, Prospect and 54 other Ohio cities.

The plant’s operators have gone far beyond their budget and missed a December target to begin generating electricity. Now, they have postponed a June ribbon-cutting. They say the delays are a normal part of a complicated undertaking.

While the plant’s owners wait, they are preparing for decades of payments on the bonds that financed the project. The bills will need to be paid, even if the project fails to produce the promised results.

The weight of debt is one reason that electricity from the plant will cost at least 25 percent more than today’s price on the open market.

“Now, the red flags are flying,” said Roberta Wade, a Galion City Council member.

She was on the panel when it approved the investment, although she doesn’t remember any briefing about the risks that now are coming to light. She is the only council member now asking for more scrutiny of electricity contracts.

The city’s involvement in Prairie State came as a result of its relationship with American Municipal Power of Columbus, a nonprofit company that manages energy purchasing for city-owned utilities in six states.

AMP is a big player in the world of public power — taxpayer-owned electric companies that answer to their local elected officials. In those places, electricity is a city service, like parks and trash pickup.

Marc Gerken, AMP’s president and CEO, says he has no regrets about Prairie State. “I think this is a great plan for our members,” he said.

His company has 129 members in seven states. Of that total, 68 chose to invest in the plant, 60 of which are in Ohio.

Prairie State is designed to produce 1,600 megawatts, which is enough to serve about 800,000 households. AMP owns nearly one-fourth of the project, which is the largest share of any owner.

The city-owned utilities in Columbus and Westerville are AMP members, but they chose not to invest in the Illinois plant.

Westerville’s City Council had concerns about the long-term environmental expenses of coal power, said Andrew Boatright, director of the city’s electric utility.

Columbus’ utility has shied away from long-term commitments in recent years. Because of this, city leaders never seriously considered Prairie State, a spokeswoman said. The Columbus Division of Power and Water has about 13,000 electricity customers, mainly in older neighborhoods, while the rest of the city is served by a for-profit utility, Columbus-based American Electric Power. AMP and AEP are not affiliated.

Prairie State is one of the largest examples of AMP’s decision to dramatically increase its spending on power plants. The change was a reaction to members’ frustration with the recent volatility of the electricity market, Gerken said. Officials in the member cities hope that if they own the power plants, the prices will be more stable.

“We base our planning on the long term, not today or this afternoon or last week,” said Gene Toy, Galion’s city manager.

His city purchased an unusually large share of Prairie State relative to the city’s needs. Galion’s portion is enough to meet more than 40 percent of its peak electricity demand. Only one other community, New Bremen, also exceeds 40 percent. These are the places where the project’s twists and turns will have some of the greatest effect.

Electricity from Prairie State will cost $57 per megawatt-hour this year and average about $65 for the life of the plant, AMP has said. This covers almost all aspects of power production and the debt to build the plant. It does not include delivery costs.

Today, an Ohio buyer can get electricity on the wholesale market for less than $35 per megawatt-hour, plus a capacity charge of less than $10 for a total of less than $45.

This does not directly correspond to the prices available to city-owned utilities, which generally sign multiyear supply contracts, but it provides a rough sketch of a market in which the going rate is much lower than power from Prairie State.

AMP officials say it is misleading to compare today’s low market prices with the price of power from a long-term asset.

Market prices have dropped largely because of the low price of natural gas, which reduces the cost of power from gas-fired plants and is a key driver of the nation’s electricity costs. This is a departure from a few years ago, when volatile gas prices contributed to wild swings in electricity costs.

“Things have changed,” said Venkat Suravarapu, director of North American power forecasting for IHS Cambridge Energy Research Associates in Massachusetts.

His long-term projection of natural-gas prices is much lower than a few years ago, a shift that is tied to the development of natural gas from shale deposits. Even if natural-gas prices make a leap from current lows, he doesn’t see wholesale electricity prices averaging higher than $50 per megawatt-hour for at least the rest of this decade, and potentially longer.

If forecasts like his hold true, Prairie State’s owners will need to wait a long time to see their investment produce power that costs about the same as the market.

The best rationale for building a coal plant might be that its output likely will have stable prices that can act as a “hedge” against an unforeseen surge in natural-gas prices, said Robert Burns, an Ohio State University researcher and utility-rate expert. At the same time, he questions the wisdom of betting heavily on coal.

“When you do a hedge, you don’t bet the farm on a hedge,” he said.

When asked about price forecasts, Gerken said his company has commissioned its own study that shows the project’s electricity would be less expensive than the market for every year the plant is in service. He showed a chart with these figures, but he declined to provide a copy or any specifics about how the chart was generated.

The $65 average price doesn’t include extra costs that might occur if the government passes a carbon tax. Concerns about such regulations are one reason that few coal plants are being built.

Gerken notes that Prairie State is a “supercritical” plant, which refers to technology that is more energy efficient than previous generations of coal-burning plants. This will reduce its exposure to a carbon tax, he said.

The plant was started by Peabody Energy, a coal-mining company that later sold most of its stake. Construction began in 2007, with a budget of $2.9 billion and a plan to open in 2011. The work started just as the prices of key components began to soar, including steel and concrete. The budget rose to about $5 billion.

To cover its share of costs, AMP has obtained $1.7 billion by selling bonds, which will be repaid from 2013 to 2047. Critics say the terms of the bonds and the price of Prairie State’s power make this look like a bad mortgage. The difference is that cities cannot walk away from their commitments the way so many homeowners have walked away from mortgages.

Environmental groups, such as Ohio Citizen Action, say AMP members have signed up for overpriced, dirty power.

“You’ve got the market shifting out from underneath them,” said Sandy Buchanan, the group’s executive director. “At the same time, you’ve got communities locked into long-term financial deals that say they have to repay no matter what. That’s the nightmare scenario.”

"BURNING BRIDGES" mike curb congregation

Earlier this week I asked Councilman Flock if the city received the grant for the bridge across the CSX tracks that would connect the “Road to Nowhere’ to Diamond Center Drive. Yesterday Andrew let me know through an email that the city manager informed him that Painesville did not receive the grant. My sincere hope is that our City Manager has a Plan "B" now that, on top of the current Cobblestone Apartments, council has voted to authorize the building of 120 more apartments/condominiums in that area. As I wondered about this bridge, I asked Mr. Flock if he had seen a copy of the grant request. Along with Painesville's request for this bridge I hope they also went out of their way to solicit help from other government entities. Were the County Commissioners asked to submit a letter to help Painesville be awarded this state grant? How about Mentor's City Manager or Mentor's Council helping with the request and explain that without the bridge it was putting a strain on traffic along Mentor's eastern border? Lake Health could have explained how important this bridge is to the city to connect this annexed land with the city and saving time on EMS runs? Alternatively, even the Lake County Port Authority could explain the number of tax dollars could be generated to the state if all these businesses that claim they will move into that area if the bridge is completed actually do so. One place you might not see wanting to contribute to helping is Painesville Township who probably believes to this day (with just cause) that the city stole that land right out from underneath them. I have no idea what or who contributed to this grant process… only that it included more than Painesville’s desire for a bridge. The title of the post? "Burning Bridges”. I have been told that Painesville has burned many government entities under the current city leadership using Painesville's ‘my way or the highway’ philosophy. I hope I am wrong. That part of Painesville has been an island too long.

"CAT SCRATCH FEVER" ted nugent

This has been an interesting week in politics, as most will be from now until November. First, a CNN reporter friendly to the White House makes a stupid statement about 'stay at home' Moms. One thing everyone should know is to stay away from critizing Moms. As Ann Romney mentioned, it was an early Birthday present. Later, the conservative rocker Ted Nugent made a statement that "if Obama gets re-elected he will either be "dead or in jail by this time next year". Fair enough... I can live with either outcome. Teddy endorsed Mitt this past week at the NRA convention along with mentioning "off with their heads in November" as well as quotes from Braveheart. Sorry Ted... wrong movie. Then we have Congressman Allen West's claim that there are between 78 to 81 communists in Congress. Not a word from the leadership about either statement. Back to Mr. Nugent for a second. During the Vietnam War, Ted in his own words, claimed that for a month before the physical he quit any kind of personal hygiene, as well as a week before the physical he defecated and urinated in his pants. Ted never was drafted, yet today he joins with the other chicken hawks Rush Limbaugh and Dick Cheney to send our troops whereever they want. Finally, Mitt comes to Ohio and has a press conference at a closed factory. 'This is what Obama's economic policies have done to people' Mitt tells the audience. Well Mitt, if you had done a little investigation beforehand, you would have found out that plant closed when George W. Bush was President. You're making it too easy.

"TOMORROW,TOMORROW" beegees

Why deal with something today that you can put off until tomorrow, then hope tomorrow never comes? Hope the outcome won't be another BeeGee hit "Tragedy"
Last night council meeting was a good example of how sad that council really is.
First let's bring in a court reporter the only thing missing was a number "3" on her equipment, and throw in a lawyer or two, watch a few council members squirm as a local politico does what they do best. With the end result. A unanimous decision to put this Steele Mansion on 1st reading?
Where has this council been the last couple of years let alone the last couple of months?
We were subjected to hearing about a possibility of litigation, winners and losers. This whole process being tabled. How the city's building department mishandled this. The lose of a "residential feel" to the neighborhood as well as neighbors being viewed as injured parties.
I guess there was no injured parties as the mansion sat in disrepair for the last 10 years? With it looking somewhat like the Adam's family mansion? That must have done wonders for your property value.
Failure to launch, can't pull the trigger worried about personnel friendships, maybe the threats against the city.
Let's put enough obstacles in the Shamakian's way so that no way can this venture ever have a positive outcome?
I believe that the Shamakian's believe if this Inn can not be used by all in the community only visiting guests maybe a college dorm will enhance the "neighborhood feel" more. Sad very Sad.
I believe Painesville just can't grasp the idea that something good can happen here anymore? We lose businesses even the hospital and view this as a very complicated ,suspicious venture.

In other news council voted down the city purchasing a new truck, Andy Flock asked how many miles were on the vehicle being replaced. A little over 29,000 miles. It needs brakes and a front end alignment?

We also approved spending 2.9 million dollars on the new sub-station being built east of the city. That was done with very little discussion, unlike the Inn that involved someone else's money? Go figure.

The city made a presentation on finances for the first quarter of the year, as well as the shooting that took place on Liberty St. this past weekend.

Many residents had issues and complaints about trash and other issues concerning Argonne Arms.

Will be watching for a moderate school levy, and a road levy for Painesville resident's this fall.

"LITTLE BIT ME LITTLE.... monkees

I received an email from a friend that shows July 2012 has five Sundays, Five Saturdays, and five Fridays in it. This only happens once every 823 years.

Now we have many groups in town promoting Painesville. Which I support wholehearted.
This July could we on one of these weekends in July support a parade to "Welcoming our Troops home from Iraq". All area wide servicemen and women who have served in this war to be honored fro their service and sacrifice.

The parade could start at the County Fairgrounds and end at Veterans Park in downtown. Or a better route can be chosen.

Maybe some of the movers and shakers could give this idea some thought?
As well as the American Legion and the VFW.

"BACK WHERE YOU BELONG" part deux

Now Planning has approved what it already had approved and it back to council Monday night. Two items on the agenda took from 7:30pm until a little after 10:00pm.
Many of you have read the article in today's News-Herald, and I will clue you in on what the News-Herald writer meant when mentioning "met with some hostility by neighbor's."

First off the Steele Mansion part of the meeting started out as deja vu all over again.

Something new was added to the mix last night. Mr. Callenders son Jamie was in attendance along with another attorney who I must believe must have been retained by Mr. Callender Sr.
For some reason it got around to Steele Mansion becoming a Bar, Nightclub, Party Center. and Jamie Callender brought forth a NEW list of restrictions?
Along with the other attorney wondering if a court reporter should be present? Then came the threat "Legal action against the city as well as the Shamakians could possibly be just around the corner in the near future.

Mr. Callender Sr. addressed the commission and claimed he has been "violated." Also certain members of the city administration have lied to him. Mr. Callender please explain how you were violated and whom lied to you from the city? It serves no purpose to leave that accusation in a public forum and walk away from it.

The Planning Commission passed the resolution and now it is back in council's hands Monday night.
I have no idea what this exercise was all about and I doubt it will bring an unanimous 7-0 vote Monday night?
I doubt that very much. I would like to tell everyone that the Steele Mansion is in the final stretch of becoming a reality but add lawyers to the mix and anything can happen. I do see an opening on the Zoning Commission very soon.

Jamie Callender brought up the fact that this Inn will be a negative business located next to his mother and fathers home as well as other surrounding properties. I beg to wonder what has been the effect on property values since that building caught on fire and has slowly declined over the last ten years? I would also wish young Mr.Callender would have approached the Shamakians about his concerns before meeting them for the first time Thursday night.

Monday evening could be a very interesting night.

"CAN'T BUY ME LOVE" beatles

A few weeks ago there was a story about a Michigan woman who won a million dollar's in the Michigan Lotto and still expected to receive her monthly food stamp allotment from the state of Michigan. Many including myself were dumbfounded as to why this woman still expected this freebee. Along with the state still sending her a check do they do any research?
Then I looked at what was going on on a national level the American oil companies had shown a 38 billion dollar profit for 2011. Yet the oil companies as well as many in Washington D.C. still believe they are entitled to a 4 billion dollar subsidy?
Maybe I'm missing something but will someone explain the difference to me between the woman in Michigan and the oil companies thinking?
With the country's budget in the shape it's in why are we still spending billions in Afghanistan and have 90,000 troops still in that war theater? Remember the reason for going there was to get Bin Laden.
Seems we never have money for things we should do in this country but for some reason we always somehow find the money to stay in a war?
Is there a war on women being waged by the Republican party? If your a woman ask yourself would a deer want to extend hunting season?

Our city administration has informed us that starting soon they will do the Main St. streetscape? They have a $600,000 grant and have added almost $300,000 of city revenue to the pot. Almost $900,000 to redo Main St. again. It would be interesting to see how much money Painesville has spent on that 200 yards of road in the last 50 years?
While were on the subject of Painesville, did the city receive that grant money for the bridge on the "road to nowhere". Waiting for good news!
Yes a ton of money seems to be going for things that don't seem to important to myself.

Now we propose a new Republican budget. First off we all should have "skin in the game". The elderly, the young, the rich in the poor. In the Ryan/Romney budget who has to make the biggest sacrifices and what group does it seem gets a bonus from this budget? Before voting this year ask yourself who benefits and who will suffer. If your honest with yourself it's right in front of your eyes.

Wait until we all find out who contributes to [ALEC] American Legislative Exchange Council. You want to know who provided funds and support to the "Stand Your Ground Law". And the right wants to talk about unions?

"BACK WHERE YOU BELONG" 38 special

Well I guess the people who own Steele Mansion got kickbacked to the Planning Commission? Yes "here we go again" Those interested the Planning Commission meeting will be April 12,2012.
Seems now the city administration doesn't believe the things the Shamakian's want to do with the mansion warrants a change in code from R2 to B1.
A comment Mr. Shamakian made was that the city would like to approve this 7-0 so I can only assume the votes for or against the Inn would be 4-3? Seems some members of council don't want to carry that stigma around with them.
This Inn is not a bed and breakfast. It is also not a Holiday Inn so can someone just get out of these peoples way so in two years everyone can saywhat a great idea this family had?
I do not share the enthusiasm that the Shamakian's do, Call it my untrusting nature of city hall. Why make them go back to where they just came from and then have someone on the planning commission decide you can't do those things in an R2?
Seems council can't get their act together on most anything. Just maybe they want the blame for this Inn to be at the hands of unelected commission members?

The only other issue that came up at council that I had any interest in the State of Ohio Pit Bulls can no longer be classified as a vicious dog. Two members of council Lori DiNallo and Katie Jenkins would like the city ordinance changed that in fact Pit Bull no longer have to be muzzled when walked in Painesville.