By securing a one-year extension on its current electricity contract with Ameren Energy Marketing, the City of Marceline has locked in its present rate until May 31, 2017. Marceline City Manager Luke Lewis explained to the Councilmen during Tuesday evening’s meeting of the Marceline City Council, “This will keep MISO costs down, and according to Bob Harbour, MISO costs are driving the market.” MISO stands for Midwest Independent Transmission System Operator; it is the agency responsible for the transmission of electricity from its source to those who purchase that electricity.
Harbour, who is an energy consultant for the City of Marceline and previously served on the Prairie State Board of Directors, had this to say about Marceline’s investment in Prairie State: This is still a good long-term investment because Prairie State owns enough coal to keep generating electricity for 30 years, and there are no transportation costs due to the Prairie State Energy Campus being located atop a coal field. The only escalation in cost will be for labor, parts and materials. Presently, the market is really low due to the existence of excess generating capacity and the fact that MISO has not established a long-term capacity market. Harbour elaborates: The demand and reserve requirement for that demand will match the existing generating capacity until 2017. Market costs will continue to rise as Prairie State’s costs stay flat. When we observed that the anti-coal lobby has been very active of late, and has been predicting massive losses for investors in Prairie State like the City of Marceline, Harbour countered: Prairie State’s design is supercritical. That is, it is surely the most efficient coal-fired plant in the Midwest, and possibly one of the most efficient in the entire country. The Sierra Club intervened in Prairie State’s filing for an air permit in Illinois. That cost Prairie State about $1 billion because the Sierra Club’s opposition tied Prairie State’s air permit filing up in the courts for two years. The two years lost cost Prairie State $1 billion because of the rising costs associated with equipment and labor. The power from Prairie State is locked in at $60 per MWh, and while that doesn’t look like an attractive price now, Harbour firmly believes that it will look a lot better in the years to come when wholesale electricity prices exceed $60 per MWh.
The City of Marceline will now continue to purchase wholesale electricity through Ameren Energy Marketing at a rate of $41.69 per megawatt hour (MWh), and, according to the ordinance the Council adopted Tuesday, the ‘end date of delivery’ of wholesale electricity to the City has been extended from Dec. 31, 2016 to May 31, 2017. “We are getting a total of 29 months at that rate (i.e., $41.69/MWh),” Lewis advised the Council. That figure is actually lower than the $47.79 per MWh Ameren Energy Marketing quoted in 2010.
Page 2 of 2 - Meanwhile, Harbour continues to monitor the City’s longer-term investment with Prairie State, although as long as the City’s contract with Ameren Energy Marketing is in force, electricity from Prairie State can’t be used to provide power to Marceline’s customers; it can only be sold on the open market. Presently, if the City of Marceline sold its Prairie State power on the open market, it would do so at a slight loss, but Harbour believes the day will come when Marceline can sell that four MW of power at a profit or use it cost-effectively at home.
Shoemaker Appointed to Complete Yocom’s Term
Josh Shoemaker has been appointed by the Marceline City Council to complete Albert Yocom’s term of office on the Council; he was sworn in during Tuesday evening’s Council meeting. Councilman Shoemaker will serve at least until the Municipal Election next April.
Yocom resigned from the Council last month after recommending that Lewis’ contract with the City be terminated. That recommendation wasn’t acted upon by the Council in open session, and Yocom’s resignation was accepted in open session after the Council returned from closed session. Lewis has since said that there was no vote taken in closed session on that occasion.