‘Turmoil’ on Prairie State-Paducah Deal; Backlash Grows; U.S. Coal Lobby Digs In

THE BOND BUYER HAS PUBLISHED AN IMPORTANT ARTICLE under the headline “Prairie State Costs Fuel Turmoil at Kentucky’s Paducah Power.”

The 1,400-word piece, by Shelly Sigo, appeared last night and lays out how the city of 25,000 is looking for a way out of its costly long-term relationship with Prairie State Energy Campus — and how the bond markets have begun to notice what’s happening.

David Schlissel, IEEFA’s director of resource planning analysis, tells Sigo that “the people of Paducah are really hurting” and that “something has to be done to help these people and it has to be a long-term solution.”

The article quotes at length Mark Crisson, the interim direct of Paducah Power System.

Excerpts:

  • “Rating agency analysts have already called to ask if the utility is considering filing for bankruptcy, Crisson said in a recent interview with The Bond Buyer.”
  • “‘We intend to present a plan in a couple of weeks …’ Some of the plan, though, depends on stabilizing operations at Prairie State, which Crisson said is out of PPS’s control.”
  • “Crisson, however, does not think bankruptcy is an option because the utility can develop a plan to strengthen its financial position and competitive position.”

Here’s the full article (subscription required).

THE PADUCAH SUN, MEANWHILE, HAS A FRONT-PAGE STORY THIS MORNING ON HOW LOCAL BUSINESSES ARE REELING from high electricity bills.

The lead: “Paducah businesses large and small are feeling the impact of hefty electric bills as Paducah Power System searches for a way to bring relief to ratepayers.”

The article, by David Zoeller, describes how the electricity bill at the city’s nonprofit hospital, Baptist Health Paducah, has increased by $800,000 this year and how a local laundromat in business since 1958 has closed its doors because “it just costs too much to keep the lights on, run the air conditioning and run the equipment.”

The headline: “Paducah Power Bills Bruising Business”

Excerpts:

  •   “The poor performance of Prairie State Energy Campus, together with Paducah Power’s large debt as a Prairie State owner/investor, have combined to produce what are believed to be the highest electric rates in Kentucky.”
  •   “The rates have sparked outrage in the community and the resignation of two top utility officials.”
  • “The PPS board is meeting at 11 a.m. today to consider an open records act request regarding the utility’s investment agreement with Prairie State.”

Here’s the full article (subscription required).

ON THE POLITICAL FRONT, BLOOMBERG IS OUT THIS MORNING WITH SOME REGULATORY REPORTING that includes a piece about how the EPA will probably not get its new utility-emission rules in place on schedule.

The agency had said it would impose the rules next June. “It now seems unlikely that initial target will make it into the final rule, due to be released next June,” Bloomberg reports.

Excerpts from that article, by Mark Drajem:

  • “The EPA’s shift came after intense lobbying by utilities, which have largely taken the position that they can live with cutting coal use, as long as they can wait until their plants reach the end of their natural life spans.”
  • “American Electric Power, a Columbus (Ohio)-based utility that’s one of the nation’s top coal users, says the EPA has overestimated the emissions reductions that can be achieved by making older coal plants more efficient.”
  • “Joe Power, vice president for federal legislative and regulatory affairs at St. Louis-based Ameren, says, ‘We need a glide path to that target.’ His company, which wants the EPA to extend the deadline for cuts to 2035, has hired former Democratic House leader Dick Gephardt and former Republican Senator Kit Bond, both of Missouri, as well as the lobbying firm Bracewell & Giuliani, where former New York Mayor Rudy Giuliani is a partner.”

More here.

Bloomberg also has this headline: “Coal’s Defender-in-Chief Tries to Shift Debate About Fuel.”

Excerpts of note:

  • “‘It’s pretty strange that, globally, not only the UN, but developed country leaders are spending so much time on, quote, climate change,’ said (Gregory) Boyce, chief executive officer of Peabody Energy Corp. ‘They aren’t focusing on how you eliminate poverty, eliminate energy poverty, and start driving global economic activity.’”
  • “Boyce is wading into an issue at the very heart of the future of the global economy, at a time when his own company, which exports coal worldwide, hasn’t reported annual profit since 2011.”
  • “Peabody’s position is drawing heavy criticism at a time when the United Nations warned in a Nov. 2 report that humans must act swiftly and boldly to cut carbon emissions to prevent widespread harm from rising global temperatures. The planet is on a collision course with disasters including floods, drought, extinction of species and ocean acidification, the report said.”

Here’s the full article

In the wake of Tuesday’s elections leading to a Republican majority in the Senate, several news organizations report that advocates for a renewable-energy economy haven’t exactly thrown in the towel.

The Los Angeles Times says “hedge fund titan Tom Steyer’s $74-million bet — most of it from his own wallet — yielded little payoff” in electing candidates simpatico with change but that Steyer is undaunted.

“‘We set out to put climate on the ballot in a bunch of states, to build an organization and to build a relationship with a bunch of voters’ …. He argued that all of that happened, pointing to hundreds of thousands of climate-minded voters newly enlisted in his organization, NextGen Climate, the emergence of global warming in the debate in several races, and the retreat by various GOP candidates from a platform of outright denial of climate science.” More here.

And mashable.com has this headline: “The Republican Election Victories Are Not the Climate Policy Apocalypse You Fear.” Here’s that story.

— Karl Cates
kcates@ieefa.org
Twitter @ieefa_institute

Categories: Peabody, Prairie State Energy Campus, Press, Wraps

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