Local group: New power plant not best option

Voters will be asked June 6 to approve a $697 million bond issue to pay for Southwest 2.

Gannaway, a Springfield attorney speaking on behalf of Ratepayers for Affordable Utilities, contends that CU management has misled the public in its position that a new local coal-fired power plant at the Southwest Power Station would be less expensive than a proposed partnership with Nebraska-based Tenaska Energy Inc. for a coal-fired plant in northeast Oklahoma.

When Gannaway requested information from CU about the wholesale cost for electricity per kilowatt-hour from a local coal-fired plant, so it could be compared with the proposals considered by Black & Veatch Corp., he said CU did not supply the information.

“What conclusion can we draw from their answer?” Gannaway said. “Either they don’t know what their cost per kilowatt-hour is, or it’s so darned high, they don’t want us to know what their cost is.”

CU officials have stated that the monthly cost increase for the average residential consumer would be $17.49 with the Tenaska partnership, compared to the $9.63 rate increase that would take effect if voters approve the new plant.

Gannaway, however, said that figure also is misleading, as it is based not on the cheapest power purchase proposal, Tenaska, but rather on a purchase proposal from a new plant to be built in Illinois by Peabody Energy.

Energy purchased through the Peabody deal would cost 33 percent more than Tenaska’s purchase proposal, according to the report produced by outside consultant Black & Veatch.

The former mayor also pointed to mismanagement by CU in recent years, such as when the utility “dropped the ball” by not promptly signing a new coal transport contract with rail carrier Burlington Northern-Santa Fe, resulting in shipping prices that are now 31 percent higher than when the old contract expired in 2004.

“Did CU tell their customers that they blew it? Of course not. They hid their mistake, just like they tried to hide their incompetent management of water pumps at Stockton Lake,” Gannaway said, referring to the three pumps that broke down earlier this month.

CU officials made no comments at the press conference, which was held at Harry Cooper Supply Co.'s training facility, 536 N. Sherman Parkway.

See SBJ's May 29 issue for more on this story, including response from City Utilities officials.