Coal plant overruns hardly whimsical

Coal plant overruns hardly whimsical

The construction cost overrun and low operating efficiency of the Prairie State Energy Campus coal plant is costing Batavia and Geneva electricity customers millions annually. D.O. Lipensky in his Sept. 6 letter suggests that the $1 billion construction cost overrun must have been due to whimsical government regulation.

That nice, simple explanation however does not fit the more complicated facts. It also implies that the Peabody Energy was innocent of misrepresentation.

In 2007 when Peabody sold Batavia and Geneva their interest in PSEC, EPA and state requirements for non-carbon pollution control by utilities were well defined. The risk of future carbon dioxide regulation was apparent and a motivator for Peabody to sell off their problematic high sulfur coal assets before they lost further value.

In 2007 the cost of utility plant construction was rising worldwide due to rebuilding from 2005 hurricanes Katrina and Rita and demand for power plant construction in India and China. Standard & Poor's, Brattle Group and other industry specialists were warning of rising coal plant construction costs. Other U.S. coal plant projects were being canceled. There is ample reason to believe that Peabody Energy knew that their coal plant could not be built for the $4 billion cost they promised and simply misrepresented the facts when they negotiated with Batavia and Geneva.

Legal action can force Peabody to share some of the economic loss but because of non disclosure agreements, only an Attorney General investigation can reveal what was known by Peabody in 2007. Action by our city councils is vital because the state attorney general's office needs to hear directly from the cities who are party to the contract before they can take action.

Please ask Batavia and Geneva city councils to join Representative Tim Schmitz and request an AG investigation.

Bill Scown

Geneva