Towns that bought shares of coal plant to get cheaper electricity have seen prices skyrocket

UPDATE, 2/15/15: James Bruggers of The Courier-Journal in Louisville takes a look at the problems the deal is causing for the Western Kentucky towns of Paducah and Princeton. In Paducah, "People really became outraged last fall, when some customers were hammered by surprise catch-up bills as high as $1,800. What had been promised to provide affordable, reliable electricity for decades, the Prairie State Energy Campus near Marissa, Ill., has turned into an economic nightmare with no long-term solution in sight." Bruggers also notes the central role of St. Louis-based coal company Peabody Energy.

More than 2.5 million residents of Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio, Virginia and West Virginia whose cities signed contracts with the Prairie State Energy Campus coal plant in Southern Illinois six years ago to get cheaper electricity made from lower-cost natural gas are now shelling out large sums for power, because the plant "has been hurt by cost overruns and mechanical problems," Dan Gearino reports for The Columbus Dispatch. "These communities likely will pay higher prices for electricity for another decade," Michael Hawthorne reports for the Chicago Tribune. (Dispatch map)

David Kolata, executive director of the Citizens Utility Board, a nonprofit group created by Illinois lawmakers to represent residential utility customers, told Hawthorne, "Given current market conditions and forecasts, there is no question that Prairie State is not turning out to be a good deal for these communities. They locked themselves into power at a very high price when they could be doing a lot better out on the market."

Some towns are fighting back. Marceline, Mo., a town of 2,200 northwest of St. Louis, managed to "transfer the share of power that it gets from the Prairie State Energy Campus to the Missouri Public Energy Pool," Gil Aegerter reports for NBC News. "Under the agreement, the city will pay $22,000 a month for the next four and a half years – down from the $100,000 a month it has been paying."

Galion, Ohio, a town of 10,000, has asked state Attorney General Mike DeWine "to investigate the circumstances that led it and many other cities to sign contracts with an Illinois power plant," Gearino reports. Sixty Ohio communities are partial owners of Prairie State. The U.S. Securities and Exchange Commission has also subpoenaed municipal power agencies for more information related to Prairie State, Hawthorne writes.