Council nods to coal plant

By Lauren Heaton

At their meeting Monday, Oct. 1, Village Council members voted 4–1 to approve the first reading of a power shares contract with American Municipal Power Ohio, committing the Village to purchase power for the next 50 years from the proposed 1,000 megawatt coal-fired plant to be built in Meigs County.

Council will hold a public hearing and a final reading of the power shares ordinance at its meeting on Monday, Oct. 15, at the Bryan Center. If it is approved, Council is committed to the new plant unless it passes another ordinance before March 1, 2008, declining to participate in the project.

About 40 people attended the meeting. After listening to nine of the 11 people who spoke during the public hearing urge Council to get more information before committing to the plant, Council President Karen Wintrow and Council members Bruce Rickenbach, Kathryn Chase and Kathryn Van der Heiden voted yes to making the commitment. Council member Judith Hempfling voted no.

Contrary to what AMP-Ohio spokesperson Kent Carson told the News last month, the contract does not have to be signed until March 1, according to Marc Gerken, president of AMP-Ohio. But AMP-Ohio prefers the commitment by Nov. 1, and several Council members expressed concern on Monday that without prospects for other long-term baseload power contracts, villagers could be faced with paying exorbitant fees for power purchased on the open market.

“The market is much more volatile, and with this plant we have the opportunity to purchase power at a much more reasonable and stable rate,” Wintrow said.

But the price comparison is only a theoretical calculation from the producer of the product, several villagers said. “AMP is a vendor who will take a fiscal loss if its customers don’t buy their product,” Pat Murphy said. “You don’t sign something because AMP-Ohio wants you to, or because the next Council might unsign it.”

Council has also failed to allow sufficient time to hear from both sides of the issue and consider fairly a decision with long-term impact, Hempfling said.

“What’s clear is that we do not lose our options on the plant if we wait,” she said. “We’ve had three discussions advocating for the coal plant and we invited zero speakers to hear the other side. We need to respect other perspectives.”

AMP-Ohio presents coal plant
At a special meeting last Thursday, Sept. 27, Council heard a two-hour presentation from AMP-Ohio on a recommended power portfolio for the Village which included the new coal plant. While villagers had to wait to speak until AMP had finished, again many asked Council to consider alternatives and complete an independent cost comparison between the new plant and the open market before making a decision.

According to Gerken’s figures on Thursday, due to energy deregulation, the price of fuel on the open market would continue to climb at a rate several cents per kilowatt/hour above the estimated price of fuel from the member-owned AMP-Ohio plant largely because the new plant would sell energy at cost. Taking into account the $2.9 billion construction cost (which has risen from an estimate of $1.2 billion in 2005), plus taxes, insurance, interest, and an estimated cost of yet-untested carbon capture technology, in 2013, AMP projected power from the new plant would cost 6.2 cents per kilowatt/hour, versus 6.7 cents on the open market. In 2032 the numbers are expected to climb to 9.2 cents per kilowatt/hour from AMP and 11.3 cents on the market.

But according to AMP’s own future cost estimates, local resident Bob Brecha later pointed out, if the AMP figures ended up in the high range and the market ended up in the lower range, the market might actually be cheaper than power from the new plant.

“In other words there is a non-negligible chance that doing nothing would cost less than getting into the project,” Brecha said. “The main point is that we have no guarantee we’ll be getting cheaper energy.”

Brecha, a professor at the University of Dayton who lectures on energy conservation, also anticipates that future carbon taxes and emissions cap and trade legislation are the future environmental costs of coal that members will have to pay through higher rates.

While AMP representatives would not specify the amount of carbon emissions the new plant is likely to produce, public interest attorney Ellis Jacobs quoted a figure from AMP’s own internal feasibility study on the plant which reported the plant is likely to produce in the neighborhood of 7.3 million tons of CO2 per year.

In addition to harming the environment, according to Shannon Fisk, an attorney for the Natural Resources Defense Commission, which opposes AMP-Ohio’s new plant, that level of pollution will cost annually anywhere from $5 per ton in 2010 to $15 per ton in 2030, using AMP’s projections. Using independent projections, the cost of pollution for coal utility users in 2030 will be closer to $35 per ton, according to Synapse Energy, or $160 per ton according to projections from Massachusetts Institute of Technology, Fisk said in an interview on Friday.

Further complicating the accuracy of cost projections for the plant is the question of energy regulation, an issue Jacobs thinks the Ohio legislature is likely to vote to re-regulate within the next year due to the burdensome rise in energy prices.

“Re-regulation in Ohio, a federal carbon tax, and state incentives for energy efficient and alternative energy production — each of these things will have a giant impact on our energy options in 2014,” Jacobs said. “Together they’ll change the entire landscape, making this the worst possible time to make a decision like this.”

Villagers request information
Given the number of unknowns factored into future energy costs and environmental outcomes, many villagers at both Thursday’s and Monday’s Council meetings requested that Council members withhold their judgement on the AMP-Ohio plant until they had more information.

John Booth told Council on Monday that he would have a difficult time making this decision if he were a Council member because they had only heard from AMP-Ohio.

“I’ve heard no details about alternative solutions that would help me make an informed choice,” he said.

Stan Bernstein urged Council to take as much time as possible to gather information with a completely open mind, and not to “stack the deck” before making the most informed decision.

“Signing now would unbalance the equation,” he said. “People assume that AMP GS [the new coal plant] produces the cheapest energy. But I don’t know that, and there is another opinion that hasn’t been explored publicly.”

Village Electric System Task Force chairman Benji Maruyama spoke briefly about several energy studies conducted by MIT called “Future of Coal: Options for a Carbon Constrained World,” and one from the Union of Concerned Scientists that calls investing in coal a “dangerous business strategy” due to the carbon cost liability.

“If coal is cheap now, in five to 10 years it won’t be cost-effective anymore,” Maruyama said. “We need proper due diligence from a purely business standpoint on this issue. It amounts to a risky and perhaps even reckless venture for the Village.”

Both Wintrow and Van der Heiden saw no problem with signing up to the project now because the Village still has the option of bowing out before March 1. And Council member Chase said on Monday that AMP-Ohio’s plan was the “lesser of two evils.”

“We either pay a profit-driven premium price for the least environmentally-friendly energy out there or a set price for more modern technology. This plant seems the better way to go, and it still leaves the door wide open for conservation and alternative solutions,” Chase said, referring to the 25 percent of the Village’s energy supply portfolio that would still be on the open market even if the Village committed to purchasing up to 3,100 kilowatts from the new plant.

A few villagers both Monday and Thursday spoke in support of committing to the plant. Joan Edwards and Jerry Sutton both supported Council’s move because signing on by Nov. 1 would give Yellow Springs a voice at the participants’ table. However, Gerken said on Thursday that Yellow Springs’ influence would be proportional to the percentage of power purchased, which is 1/1,000 of the project.

Plant not yet approved by state
AMP-Ohio outlined the permitting process for its plant on Thursday, including a projected timeline for the state’s environmental and construction permits, which must be approved before the plant can go forward. Most of the permits for the plant are not expected to be granted until after March of 2008, and the final construction cost estimate is not expected to be completed until 2009, Gerken said.

The state approval process for AMP-Ohio’s plant through the Ohio Power Citing Board does not begin until Nov. 1 and is not expected to be completed before early next year, according to Shana Eiselstein, spokesperson for the Public Utilities Commission of Ohio, which oversees the approval process. After a public hearing in Meigs County on Nov. 1 and an adjudicatory hearing on Nov. 8 in Columbus, AMP-Ohio must demonstrate to the Power Citing Board the public need for the plant and its probable environmental impact. However, cost and affordability issues related to the plant will not be considered by the power board because the municipally-owned project is not within PUCO’s jurisdiction, Eiselstein said.

AMP’s new coal plant is not expected to come on line until 2013, and the final operating costs will not be known for years after that. But in Florida, whose public utilities commission (FPUC) does consider the economic feasibility of utility projects, a recent proposal from Florida Power & Light to build two 980-megawatt coal power plants in Glades County was rejected due to the high cost of the project and the unknown future cost of carbon emissions as well as coal itself, FPUC spokesman Todd Brown said on Monday. A month later FP&L withdrew an application for a similar $2 billion 755-megawatt coal plant, Brown said.

Without the new plants, Brown said, Florida residents will continue to rely heavily on natural gas, the rising cost of which the commission still found to be below the expected cost of energy from a new coal plant. But the move has forced FP&L and other Florida utility providers to look at alternatives such as further developing landfill gas opportunities and developing more solar and biomass fuel projects, Brown said.

That exploration of other options is exactly what many Yellow Springs resident would like AMP-Ohio to do. While AMP does have several hydroelectric and wind projects, the new coal plant absolves the conglomerate from being a leader in alternative energy production, according to Fisk of the National Resources Defense Commission.

“If AMP’s members demand AMP take a different approach to energy production, that’s what they’ll have to do,” he said. “It’s important for the community to not sign up yet, to withhold support until you know more.”

Contact: lheaton@ysnews.com