City Council forwards CU power plant decision to public

City Utilities' $532 million question is going to the people of Springfield.

City Council approved the utility's electric power plant proposal, sending the question of a $532 million bond issue to finance the project to the Aug. 5 ballot.

Council, during its Feb. 24 meeting, also approved a 16 percent rate increase over four years to pay for construction of the second coal-powered electric generating unit adjacent to the existing unit at the Southwest Power Station.

The new electric rates which are contingent upon voter approval of the bond issue would provide approximately $56 million between October 2004 and July 2008, to pay down the debt.

Despite council's recommendation with a 7-2 vote questions still surround the proposal.

"I think this is the wrong plan at the wrong time," said councilman Bob Chancellor, citing economic conditions and public doubt.

Chancellor and councilwoman Teri Hacker voted against the proposal.

Other council members wanted to let the public have a say.

"I have great confidence in the collective judgment of the people in this community," said Mayor Tom Carlson.

CU General Manager John Twitty was pleased to see the proposal pass, but he knows it's only one step.

"We are pleased that this part of the process is done," Twitty said. "Now we'll be off to educate the voters of the project and hopefully on Aug. 5 have a successful election."

At the same Feb. 24 meeting, council smothered talks of increasing surcharges for CU's 18,000 Greene County customers by a 2-7 vote.

"At this time, it complicates the issue," said Mayor Tom Carlson.

Carlson and other council members prefer to keep the surcharge matter separate from the power plant bond issue. The matter may return after the bond issue is settled, but Twitty doesn't think it is necessary. Ideally, he'd rather see surcharges decrease, but he said, "Maybe the best thing is to just leave it alone."

Chancellor and Hacker, who has backed increased county surcharges from the onset, voted in favor of the surcharge resolution.

Before registering her negative vote for the power plant, Hacker said she understood the desire to send it to public vote, but that she is not ready to recommend the idea. "I'm just not comfortable at this juncture," she said, largely because of questions concerning public health.

Chancellor compared the coal power plant to the restaurant smoking ban under discussion: "We're going to discuss a bill that tells owners of restaurants that they cannot allow smoking in their restaurants because smoke is not healthy, but we're sitting here blithely saying to City Utilities, which is an organization we supposedly are in control of, That's alright, spend a half-billion dollars and build a smoking power plant.' That just doesn't make sense to me."

One member of the public spoke. Stan Van Velsor suggested CU look at alternative powering methods such as wind and solar power. He is concerned by the health and environmental impacts of a coal plant.

According to Twitty, the public board of utilities decided on the coal plant because it "is the most affordable (option) to our customers." Alternative considerations were a gas plant or not adding power locally and purchasing it from the national electrical power grid. Twitty said the city is expected to be short of power by 2008.

A price comparison study was conducted, and while a gas plant is cheaper in initial construction costs, Twitty said it is more expensive in the long run.

"A coal plant costs more to build, but it actually translates into lower costs for customers," he said. "Coal is a lot cheaper than gas."

Councilman John Wylie fears what grid rates might be when the city is in the market. "If someone else has control of (rates) we may not like it," he said.

The new electric rates 4 percent each year for four years would begin October 2004 if the public approves the bond issue.

Council already has passed a 3 percent increase for next fiscal year, effective in October. By 2008 rates will have increased 19 percent.

Chancellor and Hacker also voted against the additional rate increases.

CU's next steps are to educate the public about the need of an additional power plant and select an engineer to construct the project. Twitty said CU is forming a professional selection committee to consider qualified engineering firms.

A firm will be selected prior to the vote, he said.

"You have to assume we will have a positive vote," Twitty said. "As part of the ongoing schedule of this project, (selecting a firm is) something that you have to get under way if you're going to meet all the other timelines."