Martinsville Bulletin, Inc.
P. O. Box 3711
204 Broad Street
Martinsville, Virginia 24115
Toll Free: 800-234-6575
Power provider subject of federal investigation
Tuesday, March 19, 2013
A federal investigation into a company’s involvement in a coal-fired power plant should not affect Martinsville, which receives about 15 percent of its electricity from the plant, a city official said Monday.
Peabody Energy Corp. and American Municipal Power (AMP) have received subpoenas as part of a U.S. Securities and Exchange Commission (SEC) probe pertaining to the Prairie State Energy Campus in Illinois, according to Midwest media reports.
“The SEC is investigating (the role of) Peabody, not AMP,” city Utilities Director Dennis Bowles emphasized.
Peabody is a coal company. AMP is a nonprofit organization based in Ohio through which Martinsville buys wholesale electricity. They are among eight energy utilities that own Prairie State.
AMP owns about 23 percent of the plant. Peabody owns about 5 percent but proposed the project and led its development, published reports show.
Why the SEC is investigating Peabody’s role is not yet known, Bowles said.
However, “to my knowledge at this point,” based on information the city received from AMP, the probe should not affect AMP and its members, he said.
The subpoena so far “has had no impact on operations” at Prairie State, Bowles said, referring to a memorandum that Martinsville and other AMP members received from the organization.
The plant has been controversial due to its construction costs significantly rising over time to about $5 billion as well as it not starting to operate until last summer, months behind schedule.
Adding to that controversy is that, according to the Chicago Tribune, Prairie State is the largest source of carbon dioxide built in the nation in about 25 years. Scientists believe carbon dioxide emissions cause climate change.
Media reports show that other communities that, like Martinsville, operate electric departments and receive electricity from Prairie State are concerned about their power costs rising and — in turn — prices they have to charge customers going up as a result of issues with the plant.
To his understanding, though, Bowles said those places receive most — if not all — of their power from Prairie State, he said.
Except for small percentages of electricity it generates from water at its hydrodam and methane at its former landfill site, Martinsville buys all of its wholesale electricity through AMP, Bowles said.
But “our philosophy has always been ... to diversify,” he said, noting that power bought through AMP comes from various sources.
Martinsville began receiving electricity from Prairie State when the plant went online last summer. It is paying about $60 per megawatt hour for electricity generated at the plant, according to Bowles.
That, he said, includes the cost of electricity it receives from the plant as well as transmission costs and interest and debt service it owes toward the construction due to being a part-owner of AMP, like other member localities.
A megawatt hour is the electricity consumed if 1 million watts are used for an hour. It is roughly equivalent to the amount of power that 330 average homes use hourly, according to online sources of electricity information.
The amount that Martinsville pays for electricity from Prairie State is about equal to amounts paid for “long-term blocks (of electricity) we already had secured on the open market” through AMP, Bowles said.
Based on the city’s wholesale power costs, Bowles said he does not think city customers are paying more for electricity than they have to. He noted that customers of power sources in other nearby places pay higher rates.