"YOU JUST KEEP ME HANGING ON" supremes

Well… still no answer from our assistant manager concerning interest payments for Prairie States (no surprise there). I really believe that man cannot go to the bathroom without first consulting with the city manager. For the life of me, I cannot figure out what purpose he serves. Possibly, so our city manager does not have to attend meetings in the evenings. His job title should be “I’ll check with Rita and get back to you."

So here is another story I found in the Columbus Dispatch on Saturday. As if we don't have enough problems around here… now I find out this state of the art multi-billion dollar coal fired electric plant we are heavily invested in (Prairie State) has broken down and it might take as much as eight months (maybe more) to become operational. All this while the city refuses to tell me how much they are paying in interest on this venture.

The good news is until the plant goes on line Painesville is paying $50.00 a MW on the open market and when this plant if ever becomes operational, we will be paying $65.00 a MW. So am I to believe we are saving money?

The big question here is how much is AMP-OHIO losing on this venture every month? I believe the AMP-OHIO community members share all the risk and costs.

Painesville broke one of the first laws of business… do not have more skin in the game then your partner. Right now I would not trust this current administration to go down to Walgreen’s to pick out the right size D-cell for my TV remote. This is what is known. Makes me wonder what we don't know about how Painesville’s finances are run.

Ken Lay and Jeffrey Skillings would be proud of what AMP-OHIO has accomplished.

I expect a book out soon.... ‘AMP-OHIO… the smartest guys in the room’.

My reason for this inquiry? I want to know how and out of what fund these payments are made. Is this another example of "other" in our city budget? I do know the electric power users of Painesville are paying for this and other mistakes through those numbers on your electric bill that bears the name of "Power Factor".

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By Dan Gearino

The Columbus Dispatch Saturday May 12, 2012 5:19 AM

An equipment failure might lead to months of further delays at an Illinois power plant partially owned by American Municipal Power of Columbus.

In a regulatory filing, AMP says that one of the plant’s large fans became damaged on March 27. The company owns 23 percent of the project, the Prairie State Energy Campus, which was scheduled to open late last year and is several billion dollars over budget.

“The extent of damage and root-cause analysis is under way,” the company said.

The lead contractor at the plant, Bechtel Corp., will need 10 to 12 weeks to get critical parts needed for the repair and up to 30 weeks for some parts, AMP said. That doesn’t include the repair time, which would add an additional six weeks, the company said.

“Bechtel is working diligently to improve upon these schedules,” AMP said.

The company could not be reached today about the filing, which was made this month with the Municipal Securities Rulemaking Board.

The Dispatch reported about Prairie State on April 29, showing how cost overruns have made the plant’s power much more expensive than today’s price on the open market. At that time, AMP said there had been a mechanical problem that was a normal part of a big project, and that the repair time was not a concern. In interviews for that story, the company did not disclose the months-long timetable that is in the regulatory filing.

AMP is a nonprofit company that manages power purchasing for city-owned utilities. Sixty Ohio cities have invested in Prairie State through AMP, including Cleveland and Bowling Green. The closest investor to central Ohio is Galion in Crawford County.A spokeswoman for Cleveland’s city government said the city has been notified of the problem and city leaders will review it.

Prairie State, designed to generate 1,600 megawatts, has two identical generating units. After the fan broke in one of the units, the contractor shut down the other unit to prevent the chance of a similar problem, AMP said.

The fan is part of the coal-fired plant’s systems for reducing harmful air emissions.

Before the problem, the unit was going through testing before it was to begin providing electricity to its owners.

This latest delay could push the completion of the plant into late 2012, which would be about a year later than the first unit was supposed to come online, according to the filing.

Under AMP’s agreement with Bechtel, the contractor owes damages for each week the plant is late and places a cap on budget overruns that AMP must pay.

While this places a limit on AMP’s exposure to some costs, the member cities still need to make interest payments on the bonds that financed the project and they need to pay to replace the electricity that they had expected to get from the plant.



dgearino@dispatch.com