Peabody Energy, the nation's largest coal company, promised 217 municipalities -- including St. Charles -- and 17 electric membership cooperatives in the Midwest a source of cheap, stable electricity. The plant in Southern Illinois first began generating power in June 2012. The electricity is neither cheap nor reliable. In fact, the price of power from Prairie State is now at least double the market price of power.
The cost of building Prairie State was more than $1 billion higher than Peabody and other owners represented it would be in 2007. This was predictable and avoidable. Struggling Midwestern communities now must pay the high costs, which are being passed along to residents and small businesses or absorbed by strapped city budgets.
The federal Securities and Exchange Commission has subpoenaed Peabody Energy and project developers in an investigation of the plant. The state attorneys general in Ohio, Indiana, Illinois, Missouri, Michigan, Virginia and West Virginia should also investigate this deal. They are charged with protecting the interests of the state government, municipalities, ratepayers and taxpayers. Energy professionals, Peabody and investment banks have benefited from massive public subsidies at Prairie State. The citizens, who paid for the subsidies, were supposed to benefit. Sticking local governments with the costs of the solution is unseemly, unfair, and not right.
Director of finance
Director of resource planning analysis
Institute for Energy Economics and Financial Analysis