Last Updated on April 7, 2015 by cassnetwork
Mayor Ted Franklin today announced in concert with Mr. R. Delbert LeTang, CEO of S. G. Preston Company a venture that will assure long-term electric generation for Logansport and secure a competitive electric rate structure to ensure economic development in the entire Logansport area. SGP Energy, a subsidiary of S.G. Preston Company, will acquire and operate the facility through its designated affiliate, SGP Energy Logansport, LLC.
This new project will be a public-private partnership where financing the project will be through private sector firms, including all development and construction costs. The Logansport Generating Plant would be acquired by SGP Energy Logansport, LLC. LMU employees would continue to operate the facility under a Management, Operation and Maintenance Agreement. The Generating Plant grounds would be leased from the City of Logansport on a long-term basis. LMU and the City of Logansport will not be responsible to finance any portion of the project.
The upgraded and expanded Logansport Generating Plant will be able to supply electricity at a long-term competitive rate. In addition, the primary fuel source for the Generating Plant will be a clean burning renewable pelletized fuel identified by SGP Energy and already in use in similar facilities in the United States.
“This renewable pellet is not new or experimental in any way, shape, or form, we commit to using only proven technologies and feedstocks in projects of this nature,” says R. Delbert LeTang.
The existing Generating Plant capacity of 38.5 MW will be retrofitted to accept the renewable fuel pellets with the approval of IDEM and EPA, allowing the facility to continue to operate in compliance with current environmental emission regulations at least through January 2017. The capacity to generate will naturally progress to the second phase of the project and increased to 120 MW, continuing to utilize the benefits of the renewable fuel pellets. These two phases are expected to result in a private investment of over $120 million dollars.
The Logansport Generating Plant will continue to employ all existing LMU employees under a third party Management, Operation and Maintenance agreement, both in the immediate and long-term. This partnering of LMU and SGP Energy will not only save, but will also expand the current number of jobs at the Logansport Generating Plant.
An Acquisition and Development Fee of $1,750,000 will be placed in an escrow account within 30 days.
All negotiations and agreements are expected to be completed by the end of June 2015.
Community input is expected to then commence. Mr. LeTang has requested to be present for questions during public meetings. As always, final approval rests with 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. This plan would allow the facility to remain open, and to be re-born as a 100% renewable generator of electricity without any disruption to the employees, or legacy of this facility in the City of Logansport.
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.
Mayor Franklin made the following statement regarding this week’s developments; “The City of Logansport has ignored the issue of the future of electricity generation for more than twenty years. Moving forward, as directed by the city council and the Logansport Utility Service Board, We will continue to explore all options to address this decades old problem. This is the wrong time to throw in the towel. Our preference is to continue generating electricity in Logansport and history will one day judge this time as one that displayed our will to overcome, our spirit to survive and our determination to provide the best opportunity for generations to come.”
“LMU has some difficult decisions to make going forward concerning electric generation. Our demand for electricity is increasing, however environmental regulations have made burning coal in the existing power plant too costly.” said LMU Superintendent Paul Hartman. “To remain an independent local electric utility and to provide low-cost electricity means we have to find creative solutions. Expanding our capacity by using engineered fuel pellets to provide clean energy is a cost effective and environmentally beneficial approach. LMU whole-heartedly supports these efforts by R. Delbert LeTang, of SG Preston, and pledges our assistance to bring this development to fruition.”
“These type of projects are always a challenge, and it takes real commitment to get them completed and activated successfully. I applaud the Mayor, City Council and all others involved for maintaining this positive momentum and seeing this project and promise for sustainable, low cost power to the City of Logansport to fruition. We at SG Preston look forward to bringing the Midwest United States back to life with long-term, sustainable and local labor, and that promise will begin here in Logansport”- R. Delbert LeTang.
SOURCE : News release sent by Logansport Mayor Ted Franklin