At the close of last night’s meeting of the Marceline City Council, Marceline City Manager Luke Lewis made the following statement:
“I am pleased to announce that the City of Marceline has entered into a purchase agreement with the Missouri Public Energy Pool (MoPEP) to purchase Marceline’s four megawatt’s of power from Prairie State at a subsidized rate through May of 2017...Marceline’s total rights and financial obligations under its contract with Missouri Joint Electric Utility Commission (MJMEUC) will be assigned to MoPEP...
Marceline’s reason for negotiating out of this agreement has been based solely on financial reasons due to limited revenues and rising expenditures to maintain our current quality of life and services to the community. As you know, a previous Marceline City Council made the decision to enter into a contract for four megawatts of power from the Prairie State Power Plant. With Marceline’s electric needs of today that amount is more than we need and is double what was recommended at the time. To further complicate our current situation, Marceline has a full-requirements electric contract with Ameren, which extends until May of 2017. The City initially entered into this contract back in 2010 because of the uncertainty of when Prairie State would come online.
Cuts to City budgets and even decreasing the amount of transfers to other City departments have not been enough to maintain a balanced budget. Despite these circumstances, Marceline has paid its pro-rata share of the power plant every month. However, it has left the City with minimal reserves this year and no way to fund long-term projects. As a result of our dependence on revenue from electric rates to fund basic city services and an inability to raise taxes, our bill to MJMEUC has become unaffordable.
This agreement will save the City of Marceline $6,000,000 in revenue loss over the next five years, and allow the City to evaluate and implement a strategic plan for future power sustainability.
I believe Prairie State has the potential as a valuable project on a long-term basis that will provide communities in Missouri with stability for their electric power needs; it is just that Marceline can no longer afford its continued investment due to current financial circumstances. MJMEUC President Duncan Kincheloe has stated the four MW additions, plus a newly approved 20 MW long-term wind contract, further strengthens MoPEP’s energy portfolio. With the strengthening of the MoPEP and MJMEUC portfolios, the City of Marceline will evaluate its long-term energy needs and maintain its MPUA membership, allowing MoPEP the first right of refusal on future power purchase agreements...
The City of Marceline values its membership with MPUA and is grateful to CEO Duncan Kincheloe and the MPUA staff, which helped us solve our unfortunate situation.”