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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Tuesday, January 15, 2008
By MICKEY POWELL - Bulletin Staff Writer
Martinsville has had “a real tight turnaround time” in considering whether to invest in three American Municipal Power-Ohio power plant projects, said City Manager Clarence Monday.
The city has been aware of one project, a coal-fired plant in Ohio, since late 2003 or early 2004, said Public Information Officer Scott Coleman. However, the city did not join AMP-Ohio until early 2006 and previously bought power from American Electric Power and Cinergy.
Monday said the coal-fired plant in Ohio project still is evolving. A proposed contract for the city to take part in it is not yet ready, he said.
AMP-Ohio determined the other two projects — a coal-fired plant in Illinois and three small hydrodams in Ohio — to be viable only during the past year, Coleman said.
For those reasons, the city only recently has been in a position to formally consider the projects, officials said.
AMP-Ohio has proposed the projects to try and help the city reduce its wholesale power costs. Martinsville would buy electricity generated by the plants via the organization, which acts as the city’s agent on the wholesale market.
Martinsville City Council first heard about the projects on Nov. 27. Monday said city officials began gathering information on the projects in September, and that was when he first became aware of them.
The city did not actively seek the information, Monday said. Rather, it was “flowing into the office on a regular basis” by September.
It was not unexpected. When the city joined the organization in early 2006, “it was known that AMP-Ohio would be asking its members to get involved in projects as time moved on,” said Monday.
Yet it was not until late November that the city had enough details of the projects for the council to be able to consider them, he said.
Dennis Bowles, superintendent of the city electric department, said he first became aware of the projects in October. He has worked in the department for more than 30 years but became superintendent only a few months ago.
Previous city administrators no longer working in Martinsville may have known about them, Bowles said.
An independent consultant, GDS Associates Inc., is analyzing information AMP-Ohio has provided Martinsville and assessing how the city will fare if it participates in the power plant projects.
GDS also is trying to get answers from AMP-Ohio to questions the city has about the projects. Questions include how much Martinsville would have to spend if it takes part in just one or two of the projects, as well as the debt service on those projects, according to city officials.
Officials have said that by investing in the projects, the city could be considered a part-owner of them because it is a member of AMP-Ohio.
Still, AMP-Ohio legally would own the plants — it is one of multiple partners in the Illinois plant now under construction — and it, not the city, is obligated for the debt on bonds secured to finance the projects, Coleman said.
If the city invests in the plants, “essentially we are purchasing power,” said Coleman. “We’re just locking in a favorable rate (for buying wholesale power) ... and will not be listed (in official documents) as an owner.”
Yet if for some reason construction of power plants is stopped, the participating cities still would be liable for any costs incurred up to that point, said AMP-Ohio Director of Communications Kent Carson.
GDS will provide its findings to the city sometime this week, said Bowles.
The city council will decide next Tuesday whether to invest in two of the power plants. It has until March to decide on the Ohio coal-fired plant, Carson said.
“We’re trying to get all of the information we can together” before next week, said Monday, adding that the city will make GDS’s findings public.
GDS has been a consultant for Martinsville since 1973. Since then, the firm frequently has studied power supply-related issues for Martinsville and other Virginia communities, as well as Virginia Tech, city officials said.
Specifically for Martinsville, GDS has helped the city evaluate various power suppliers and power supply contracts, studied retail rates charged by electric utilities and helped the city determine appropriate rates to charge customers, among other projects, according to Jack Madden, the firm’s vice president of power supply services.
Now, GDS is monitoring AMP-Ohio’s efforts to develop power plants and, when appropriate, giving input to AMP-Ohio staff on matters such as plant design and the selection of contractors, Madden said.
GDS does not generate power. Neither does it serve as an agent for localities in buying power in the same way as AMP-Ohio, Coleman said. |
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