August 29, 2013
The city of Galion has become the first in Ohio to ask Attorney General Mike DeWine to investigate the circumstances that led it and many other cities to sign contracts with an Illinois power plant.
Galion, about 60 miles north of Columbus, is one of 60 communities in the state that are partial owners of Prairie State Energy Campus, a coal-fired power plant in southwestern Illinois that has been hurt by cost overruns and mechanical problems.
“The biggest question we have is whether these communities were given accurate information at the very beginning to make their decision,” said Don Faulds, Galion City Council president.
The council voted 4-2 on Tuesday to ask for the investigation.
A DeWine spokeswoman said it would be premature to comment before receiving Galion’s request.
Prairie State, designed to generate 1,600 megawatts, began construction in 2007 with a budget of $2.9 billion and plans to open in 2011. Electricity began to flow from the plant in June 2012, but the budget had soared to more than $5 billion.
American Municipal Power, a Columbus-based company that manages electricity purchases for city-owned utilities, bought 23 percent of the plant for its members. The company paid for this by selling shares to individual cities. Among the other co-owners are the city governments in Cleveland, Hamilton and Bowling Green.
AMP urged Galion not to ask for the investigation, saying that there was no evidence of wrongdoing and that a probe only would bring bad publicity. Kent Carson, an AMP spokesman, did not respond to a request for comment.
Galion’s council voted in 2007 to buy a share of the plant that would provide about 40 percent of the city’s peak electricity needs.
Meanwhile, a Missouri city has successfully negotiated a way to abandon its investment in the plant. Marceline, located northwest of St. Louis, reached a deal with the Missouri Public Energy Pool this month to transfer the ownership stake in Prairie State. Officials in the city said they faced financial ruin because of the high cost of electricity from the plant.
So far, Ohio communities have been shielded from large rate increases, partly because AMP has been using its financial reserves to offset the above-market power costs from Prairie State.