"ANOTHER BRICK IN THE WALL" pink floyd

This article appeared in the Cleveland Plain Dealer a few days ago. Sound familiar?

Has The Project Group effectively monitored public utility issues for  Cleveland City Council?

By Lelia Atassi

The Project Group, operated by principals John Zayac and Michael Tuan Bustamante, has been under contract for the past 18 years to monitor public utility issues for Cleveland City Council. But the consultants did not report on several controversies related to utilities until after the Plain Dealer exposed them. Some examples;

Meigs county coal plant

In 2008, city council hired ION Consulting, a a Denver-based firm to evaluate Cleveland Public Power's plans to enter a long -term contract with AMP-OHIO to build a coal-fired power plant in Meigs County, Ohio.

ION 's report told council that intensified community opposition, and environmental concerns, increases in construction costs and ever changing technologies to control harmful emissions had made coal-fired power plants a dicey venture for most public utilities.

ION went on to forewarn that lenders will finance such a risky project only if the participating communities and utilities sign long-term power purchase agreements that require them to pay, whether or not they receive the low-cost power they bargained for.

Despite the  warning, Cleveland Public Power agreed to the "take or pay" contract.

And as ION prophesied, after several years of protests from environmentalists and a spike in the project to nearly 4 billion, AMP aborted the Meigs County coal plant altogether in 2009.

Cleveland was responsible for $13 million in "stranded costs" to cover plans for a plant that was never built. Agreeing to participate in another AMP-driven deal to build a natural gas plant in Fremont whittled that cost to about 8 million, which would be split between customers and a construction-debt fund.

John Zayac, one of the principals for The Project Group, said in a recent interview that councilman Matt Zone, then-Chairman of Council's Utilities Committee, had sent him to southern Ohio for an AMP conference on the project, Zayac said the project seemed disorganized and left him feeling uneasy. He said he relayed his feelings to Zone but was never asked to follow up with additional research.

"Eventually, it died a slow death" Zayac said.

Zone said in a recent interview that he did not request further follow-up from The Project Group because he was relying on the advice from ION instead. He said that his interpretation of the ION report was that the take-or-pay contract was a risky proposition but it made sense to buy power at a fixed cost, given the unpredictability of the market.

"No offence to The Project Group" Zone said "But we needed a specialized consultant to do the work."

The Prairie State Energy Campus

Problems with another coal-burning power plant, this one in Illinois, also did not appear in The Project Group's reports until after a Plain Dealer story detailed the issue in September 2012.

In that case, Cleveland Public Power's long-term contract through AMP resulted in the utility's customers paying a rate that was 42 percent higher than market for the first year of operation. Other problems identified could cause rates to spike for years to come.

But The Project Group did not weigh in on the matter until after the story ran in the newspaper, and then only summarized the article. In a later report, the consultants noted that they had spoken with Marc Gerken, the president of AMP, who assured them that although the cost of energy from the plant is high, "this cost is consistent with projections that were developed when Cleveland Public Power chose to invest in the project."

Zayac said in a recent interview that he did not follow up with additional research on the project because council did not request it.

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Now what happens if Cleveland defaults on the Prairie State agreement? What are these fixed costs I keep hearing about, nothing is a fixed cost. Oh and the documentation that AMP-OHIO claimed no knowledge of knowing about The price of power in 2013 being $48.06 has been found and should have found it's way to city hall. It seems the presentation by AMP in November to city council a NEW graph was used by AMP-OHIO not the one presented to council when the vote was taken.

Look a fish stinks from the head down.

I don't know how much money must be lost before Painesville City Council does anything but "gather data?" Maybe the smart move would be for Verionica Dahlberg have council send a letter to whomever?