Martinsville Bulletin, Inc.
P. O. Box 3711
204 Broad Street
Martinsville, Virginia 24115
276-638-8801
Toll Free: 800-234-6575
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Sunday, December 23, 2007
By MICKEY POWELL - Bulletin Staff Writer
Martinsville City Councilwoman Kathy Lawson said Friday she is “rather annoyed” that American Municipal Power-Ohio sought the city’s commitment on power plant projects long before it actually was needed.
“They told us the drop-dead date” for a commitment was this month, said Lawson. If the council had known it had until the end of January to commit, it would not have scheduled a public hearing last Thursday and instead would have held the hearing during its next regular meeting Jan. 8, she said.
“I feel like there was a hidden agenda” on AMP-Ohio’s part and as a result, “I’m definitely more cautious about them” now, Lawson said.
City Public Information Officer Scott Coleman said AMP-Ohio originally told City Manager Clarence Monday a commitment was needed from the city by Nov. 27. But Monday told AMP-Ohio that was too soon and asked for the deadline to be extended until Dec. 11. AMP-Ohio agreed.
The council heard an initial presentation from AMP-Ohio about the power plant projects on Nov. 27, but some of the presentation occurred during a closed session. The city did not release detailed information regarding its options and how much it would have to invest until Dec. 7.
City Attorney Eric Monday then learned from bond counsels that the actual deadline for AMP-Ohio’s member cities to commit to investing in the plants is Jan. 14, Coleman said. So the city asked AMP-Ohio for another deadline extension until the end of January, and the extension was given, he said.
AMP-Ohio agreed to extend Martinsville’s deadline because it already has commitments from 80 percent of its members interested in investing in the plants, Coleman said. That level of commitments was needed “to make these projects happen,” such as through obtaining permits and financing, he added.
Coleman said he does not think AMP-Ohio was being dishonest. In seeking a commitment from Martinsville, he said, “I don’t think they ever said ... you couldn’t participate” in the projects if a commitment was not made either in November or December.
Rather, in seeking commitments before January “with a little bit of wiggle room,” AMP-Ohio thought “they could get what they needed” in terms of enough commitments to proceed with the projects, Coleman said.
AMP-Ohio is “trying to move as quickly as we can so we can lock in interest rates (for the plants’ construction) while they’re still low,” Pam Sullivan, the organization’s vice president of marketing, told the council during the public hearing Thursday.
Lawson and Councilman Ron Ferrill said Friday they do not think AMP-Ohio deliberately misled anyone about when a commitment was needed.
“But I like for people to tell me everything up front,” Lawson said.
She added that she is “definitely leaning toward” voting against the city’s investment in the power projects.
A major reason she cited is the uncertainty over how future environmental laws would affect the city’s involvement in the plants.
“You never know what type of environmental controls will be coming down” from the federal government, she said. “Regulations are always changing.”
Ferrill said he still is studying information and “at this point, I’m not (leaning) one way or the other.”
He said, though, that he is concerned about the lengthy commitment the city would face.
Other council members could not be reached Friday.
AMP-Ohio has proposed that the city invest $3.5 million a year for 40 years — a total of $140 million — in the power plant projects in Ohio and Illinois. That amount mostly represents power purchased from those plants although debt service on the construction is included, city officials have said.
Sullivan told the council Thursday not to think of the money as investing in power plants but as a commitment to buy power from those plants.
AMP-Ohio uses those commitments to get financing for the plants, she said.
But “it’s the same thing as debt,” Ferrill said. If the city was to invest, “I’m (the city) still paying your debt.”
Eric Monday said AMP-Ohio, not its members, would incur the debt on the plants’ construction. However, he said if AMP-Ohio was to default on bonds issued for construction, “it does become the responsibility of constituent members” of the organization, based on what bond counsels told him.
Otherwise, AMP-Ohio’s debt on the plants would not affect the city’s debt limits or ability to borrow money, officials indicated.
Martinsville is considering investing in the power plants to try and curb the city’s spending for wholesale electricity.
The issue for council members to consider is “Does Martinsville want to invest in power production facilities to have some control over volatile wholesale power?” City Manager Clarence Monday told the council.
If the city chooses not to invest in the plants, it can continue buying power on the wholesale market, he said. The effect on its customers’ electric bills is uncertain, he said.
The power plants could not supply most or all of Martinsville’s electricity since about 85 other localities are expected to invest in the plants and buy power from them, according to officials.
But with wholesale prices continuing to rise, Clarence Monday said, “one can speculate that (city customers’) electric bills will continue rising” since the city will have to pass along its increased costs to consumers.
Long-term power rates through the AMP-Ohio plants are anticipated to be less than market rates, but there is no guarantee, said Sullivan.
“Nobody knows what the market truly will look like” over the next 40 years, Monday added. “All you can do is predict.” |
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