Mayor recommends terminating power plant negotiations

Last Updated on December 17, 2015 by cassnetwork

A controversial project into which Logansport’s elected officials invested millions of dollars in consulting fees and legal fees over the last four years appears to be coming to a halt.

In a letter to the Logansport City Council dated Dec. 16, 2015 and released to the media this morning, Mayor Ted Franklin says he’s recommending that the council terminate negotiations with any and all developers, terminate the RFP process and rescind the mayor’s authority to negotiate a build-operate-transfer agreement.

In November 2012, a consulting team recommended that the Utility Service Board request proposals from companies interested in building a new generating plant to make the electricity LMU sells to its customers. After months of negotiations with two companies failed, the mayor announced in March 2015 that SG Preston – Energy had a plan to re-power the existing plant. The Utility Service Board and the Logansport City Council approved the necessary agreements in October, but at the meeting where the Board of Works was to award the contract, the city’s lawyer said the company had asked that the vote be postponed.

Franklin says an agreement was reached on December 11, but changes to the agreements that the council had approved in October would have required additional approvals from the city council and the utility service board. He writes that because of advertising requirements, it would be difficult to acquire the necessary government approvals before December 31.

Franklin references a motion filed by attorney Jim Brugh to “intervene and reverse the ‘already granted IDEM approval’ to conduct test burning of the proposed fuel pellets.” He says because of the move, the company’s “rate of return on their investment and their business model could no longer be viewed with any degree of certainty.”

Mayor-elect Dave Kitchell has named Brugh as his appointment as LMU’s attorney effective January 1, 2016. Brugh represented Kitchell’s wife, Julie, in a lawsuit related to the power plant.

Franklin says in a conversation Tuesday night with SG Preston – Energy, they informed him that “even though all $300 million in funding was available, they were no longer willing to invest their assets into a city with such a toxic and unwelcoming business environment.”

LMU currently purchases about 70 percent of the electricity it sells to its customers from Duke Energy and makes the rest at the generating plant on Race Street.

The Logansport City Council’s Utility Committee is set to meet at 4:45 p.m. Friday, followed by a special meeting of the Logansport City Council at 5 p.m. The regular monthly meeting of the Utility Service Board is set for 7 p.m. Tuesday, Dec. 22 and includes an update on the power plant project.

Read Mayor Ted Franklin’s letter to the City Council

Cass County Online