Batavia customers file suit against electricity provider

Updated 8/19/2014 6:35 PM

Nine Batavia utility customers have filed a class-action lawsuit, claiming consultants were negligent when advising city officials whether to make a 30-year, $240 million investment in the Prairie State Energy Campus.

The suit, filed Tuesday, contends as a result of the alleged negligence, Batavia has paid at least $19 million more for electricity generated by the Washington County plant than it would have if it bought the electricity elsewhere.


Joe Marconi got the ball rolling, hiring a lawyer to look into the deal, after receiving a $1,000 electricity bill for Gammon Corners, a house that contains his home and one of his businesses in downtown Batavia. He wants the suit to force the city to reveal information it has withheld, due to confidentiality agreements it signed. "Is that the way we do it in a democratic society?" Marconi said Tuesday.

"What we want to do is get Batavia out of this entanglement it got itself in," he said.

Marconi is a plaintiff, along with his wife, Adelina; Richard A. Benson; Louis M. Benson; Daniel Soliz; Margret Soliz; Mary Popiel; John Wulff; and Emil Goellner. All own property or businesses in Batavia.

The defendants are the Indiana Municipal Power Agency; the agency's Services Corp.; Rajeshwar G. Rao, president and chief executive officer of IMPA; Sargent and Lundy LLC; and Skelly and Loy Inc.

In addition, Peabody Energy Inc.; Prairie State Energy Campus Management Inc.; the cities of Batavia, Geneva and Rochelle; the Northern Illinois Municipal Power Agency; the Illinois Municipal Energy Association; plant builder Bechtel Corp.; and seven other companies and municipal power entities are named as respondents in discovery.

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They are being asked to answer 30 questions, and supply documents, about the deal to build and run Prairie State's coal mine and power plant. They could later be changed to defendants.

Peabody and Indiana Municipal Power Agency representatives could not be reached for comment.

"The city has to take a very close and cautious look at it (the lawsuit)," Batavia Mayor Jeff Schielke said Tuesday. He said it has been turned over to the city's attorneys for review.

The charges

The suit contends the defendants "negligently misrepresented" the cost of building the plant; the time it would take to build it; the cost of the power it would produce; the amount of power it could consistently produce; the viability of using high-sulfur, high-ash coal to fuel the plant; maintenance issues that would arise from using such coal; the impact of not having an experienced builder/operator for the plant involved; the "skyrocketing" cost of plant construction in the United States at the time; that the advertised cost of electricity was not attainable; the risk of obtaining too much of the city's electricity from Prairie State; and that "state-of-the-art" custom-made equipment would be used, when the equipment was obtained from a canceled Texas project and was designed to burn a lower-sulfur coal.

According to the suit, Peabody Energy's main business is coal mining, and it was looking for a way to use a large reserve of southern Illinois high-sulfur, high-ash coal that it had difficulty selling in the U.S.


In May 2004, Batavia hired the IMPA consulting arm to study six electrical-supply options, as its contract with ComEd was due to expire soon. According to the lawsuit, IMPA consultants did not tell Batavia officials that the agency itself had decided to invest in the power plant.

The suit also contends that IMPA consultants imposed an "arbitrarily short decision deadline" on Batavia in April 2007 to commit to the plant. And it says that the consultants knew as early as 2005 that the plant could not produce electricity for the $46 per megawatt hour Rao told Batavia officials. The lawsuit contends that since the plant started operating in 2012, costs have risen as high as $179 per megawatt hour.

What's next

The suit seeks unspecified actual and punitive damages. Batavia electrical customers are being asked to join the lawsuit. A meeting is set for 6:30 p.m. Thursday at the Batavia Public Library, 10 S. Batavia Ave.

The suit was filed in Kane County Circuit Court. A Nov. 6 court date has been set.

Marconi said he is also considering suing Peabody in federal court.

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