2009.10.22 Press Release
Report: AMP Coal Plant May Be 'Toxic Asset' For Ratepayers
Contact: Nachy Kanfer, 614-625-3894
Municipal utilities will lose flexibility, raise rates if American Municipal Power plant is built.
Columbus, OH: Ratepayers in AMP member communities are on the hook for electric power they may not be able to afford, according to a new report released today by the Sierra Club. The report, entitled New Insights Into the Proposed AMP Generating Station: October 2009, analyzes recent market trends and concludes there is no economic reason for AMP members to participate in the proposed AMP plant.
Ohio faces no further growth in electric demand for the foreseeable future, due to new state and federal regulation and the near-term impacts of the recession, according to the report. This means AMP members are better off maintaining the flexibility to purchase power from the grid while investing in low-cost energy efficiency, combined heat and power, and other alternatives.
"It's beyond time for AMP's members to get together and cancel the project before it's too late," said Nachy Kanfer, a representative of Sierra Club in Ohio. "Under no circumstances could this plant now be a good deal for AMP ratepayers."
The AMP plant was originally proposed in 2006 as a $1.5 billion project that would provide electricity to municipal utilities across Ohio, Michigan, Pennsylvania, West Virginia and Virginia. Though construction of the project has not yet begun, costs have already increased to approximately $3.9 billion, including financing, while energy demand and market prices have fallen dramatically and efficiency and other alternatives are becoming increasingly available.
Elected officials in many different AMP municipalities are now concerned that if AMP proceeds with construction, their constituents will be forced to pay higher rates than surrounding non-AMP cities for decades to come. Andrew Flock, a city council member in Painesville, OH, said he's worried that Painesville didn't ask the necessary questions before buying into the project.
"Would you ever sign a contract to buy a house without knowing how much it would cost to fix up?" asked Flock. "That's what AMP asked us to do with this coal plant. It's not common sense."
Danny Turner, a city council member in Martinsville, VA, said the underlying assumptions behind the justification for building the AMP plant couldn't withstand the light of day.
"One of AMP's arguments in the beginning was that electricity demand was going to grow 2 percent or 3 percent a year," Turner said. "And that's just not true."
The Sierra Club report identifies a more financially secure path for AMP and its members. This path includes aggressively implementing end-use energy efficiency programs, continuing to purchase cheap market power, and investing in combined heat and power and low-cost renewable generation. The report also examines four AMP municipalities - Cleveland, Bowling Green, Shelby and Painesville - in greater detail.
The full report can be accessed at http://www.sierraclub.org/coal/oh. Hard copies are available by request.
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Contact: Nachy Kanfer, 614-625-3894