Cleveland among 60 Ohio cities paying millions for electricity they never received

$5 billion power plant fails to open on schedule

CLEVELAND - Cleveland is among 60 cities and towns across Ohio that paid millions of dollars in bond payments for a new, $5 billion power plant that produced no electricity for months.

The Prairie State Power Plant, located in southern Illinois, was financed through the sale of municipal bonds.

Interest payments on bonds became due last March and triggered huge payments for cities like Cleveland, which is being billed $251,536.80 monthly.

Meanwhile, the plant produced zero electricity while bond payments since March totaled $3.7 million that cities were required to pay.

Our investigation found documents filed with federal regulators that revealed the plant sustained "a failure" in exhaust fans that remove toxic gas from inside the plant.

As a result, the plant did not get online.

In addition, we found a coal mine that's owned by the plant next door has been cited by the U.S. Mine Safety and Health Administration for safety violations relating to its ventilation plan for methane gas, as well as deficiencies in its roof control plan.

Additional documents reveal the plant was seven months behind schedule for operating Unit 1 and Unit 2 is not forecasted to begin operation until the end of the year.

The delays in starting up, coupled with bond payments, are triggering concerns among some cities that signed on and are participating in the plant.

"My residents are concerned," said Painesville councilman Andy Flock. "Are they going to take and raise my utility rates to pay for this?"

Meanwhile, Painesville was spending $100,614.72 since March in bond payments.

"We're paying this money and we're getting nothing for it," said Flock.

Cleveland Councilman Mike Polensek is also concerned about the city's partial ownership of a coal-fired plant.

"We're getting a good hosing," said Polensek.

Prairie State is not the only coal-fired plant that has burned Ohio taxpayers.

Two years ago, another proposed plant located in Meigs County, Ohio, was dropped after cost overruns hit more than a billion dollars.

But under the terms of the deal, Cleveland and other cities are required to pay for the costs.

"A financial disaster for the city," said Polensek, who is concerned about Cleveland's commitment to coal-fired power plants.

 

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Cleveland and other cities are partial owners of both plant, along with American Municipal Power.

AMP is a non-profit corporation based in Columbus, Ohio, that owns and operates electric facilities for member cities.

"Who keeps getting us in these deals?" asked Polensek.

One consistent supporter has been Cleveland Public Power Commissioner Ivan Henderson, who also serves on the board of American Municipal Power.

That's a concern for Cleveland Councilman Brian Cummins who questions whether there is a conflict of interest with Henderson serving in both positions.

"I think it's obvious -- it's clear," said Cummins.

Henderson strongly disagreed, believing instead that serving in both positions gives Cleveland additional leverage.

"We are the largest member of AMP," said Henderson," so our concerns are AMP's concerns."

Even so, the cost of electricity on the open market is currently much lower than Cleveland rate payers will be billed as owners of Prairie State.

Still, Henderson said he believes that participating in the Prairie State power plant is in the long-term interest of Cleveland rate payers.

"This is a 40-year investment," said Henderson." You recognized that power market  will go up as well as go down."

Prairie State officially began producing electricity in Unit 1 last month and predicts Unit 2 will go online by the end of the year.

Plant officials denied our request to tour the facility or be interviewed.

Watch this story tonight at 11 p.m. on NewsChannel5. Tweet Ron your comments on Twitter: @InvestigatorRon.

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