Power Plant Deadline Passes, Mayor Issues Statement

Last Updated on December 20, 2015 by cassnetwork

MAYOR FRANKLIN ANNOUNCES CONTINUED EFFORTS TO REPOWER AND EXPAND
LOGANSPORT MUNICIPAL UTILITIES POWER GENERATION

Mayor Ted Franklin announced today his continuing efforts to achieve the primary objectives of the Rate Stabilization Initiative (primary objectives), which are:

A public-private partnership will be used to finance the project where private sector firms pay all development and construction costs and LMU operates and purchases the facilities through a lease to purchase arrangement using electrical power sales to pay the costs.

LMU and the City of Logansport will not issue bonds to finance any portion of the project.

The upgrade and expansion must be able to generate electricity at a target cost to LMU of no greater than 5.5 cents/kilowatt-hour.

The primary fuel source for the repowered power plant and the new power plant must be clean-burning refuse derived fuel (RDF) pellets.  Natural gas may be used as the backup fuel.

“Despite diligent efforts and progress, negotiations with the Operator, TCS Logansport Energy Group, have not resulted in an agreement that achieves our primary objectives,” said Mayor Franklin.

Mayor Franklin continues to work in conjunction with the Common Council, LMU and the Utility Service Board toward the establishment of an alternative arrangement with a qualified provider, such as a lease-purchase agreement (under I.C. §§36-1-10-1—36-1-10-21), a power purchase agreement, or similar contract, which attempts to achieve the primary objectives.

Currently, four (4) private sector providers have expressed an interest in in exploring all options. They are briefly summarized below:
Purchasing wholesale electricity under long-term electric rate agreements.

Repower the existing 38 MW power plant operated by LMU and expand its capacity to 120 MW utilizing renewable fuel.  This is a partnering effort of two of the original RFP responding firms.

Repower the existing LMU power plant to 120 MW using co-generation technologies.

Repower the existing LMU power plant utilizing renewable fuels, with R & D provided by established State Universities.

The City and LMU will continue to evaluate all proposals based on the responder’s experience with the proposed technology, the quality of their technical proposal, and an assessment of their ability to deliver electricity at the most competitive cost.  It is expected that all negotiations would be completed within 90 to 120 days.

Community input is expected to then commence, including public meetings, with final approval or decisions by the Utility Service Board and the Logansport Common Council.  The project would transition to preliminary design, environmental reviews, and permit approvals from the Indiana Department of Environmental Management.

The existing Race Street facility must be closed no later than January 31, 2016, as a result of stringent regulations mandated by the United States Environmental Protection Agency. Because winter weather can dramatically affect those efforts the facility is scheduled to be retired in October of 2015.

The City of Logansport is currently under contract to purchase its electric supply requirements from Duke Energy through December 31, 2018, and is not required to provide notice of future intent with regard to electric supply requirements until December 31, 2016.

 

SOURCE: Press Release from Mayor Ted Franklin