UPDATE -- June 20th, 2011 -- Council voted and approved the 60 MW share participation in the AMP Fremont Energy Center project. The vote was 15 to 2 with Councilmen Michael Polensek and Jeffery Johnson voting against. Council met for two additional hours this morning to discuss the project for the third time in hearings, and then a vote was held at 12:00 noon.
A major part of the deal also handles $12 million in stranded costs assigned to Cleveland Public Power (CPP) that is attributed to the failed AMP Generating Station (coal) project. Of the total $12 million, $4 million is being eliminated or pick-ed-up by non-AMP participants share in the AFEC project; $4 million will be paid as part of the power contract over a 15-year period, and $4 million will be paid out of CPP's operating expenses and will have an impact of increasing rates to CPP customers by $4.00 per year. But, the 60 MW, 35-year power purchase contract will eventually replace existing short-term (1-2 year) contracts which are typically far higher in price that what the estimated price is for power under this new contract, and the net effect is anticipated to save rate payers money.
UPDATE -- June 16th, 2011 -- Cleveland City Council will be holding a Special Finance Committee & Public Utilities Committee meeting on Monday, June 20th, 9:00 am, 601 Lakeside Avenue, Room 217, immediately followed by a special City Council Meeting where a vote is expected on Ord. 680-11.
CPP & AMP have provided additional information that was requested by Council and more information will be reviewed tomorrow as well. I'll try updating this post again over the weekend leading up to Monday's meeting and vote. Overall, it's been disappointing to have received the legislation just a week prior to going into our legislative break. The opportunity to participate in a natural gas power plant appears to have some great benefits, but the 60MW participation amount represents approximately 16-20% of CPP's total power purchases and I'm uncertain of the risks that come with entering into a 35 year contract for this one source of power.
Here is some of the additional information we received:
- Primary purchase agreement for the new combined cycle natural gas plant
Asset Purchase Agreement between AMP and First Energy
- Participants Contract with AMP for shares in the AMP Fremont Energy Center project
AMP Fremont Energy Center Power Sales Contract, dtd 6/30/2011. One of Four; Sections 1 - 4
AMP Fremont Energy Center Power Sales Contract, dtd 6/30/2011. Two of Four; Sections 5-20
AMP Fremont Energy Center Power Sales Contract, dtd 6/30/2011. Three of Four; Sections 21 - Appendix B
AMP Fremont Energy Center Power Sales Contract, dtd 6/30/2011. Four of Four; Appendix B - M
UPDATE -- June 6th, 2011 -- Cleveland City Council has decided not to hear or vote on the legislation today and American Public Power has confirmed their actions to seek an extension of the AMP Participants deadline to confirm inclusion in the AFEC (from June 15th to June 30th), as well as seek an extension for the closing of the Purchase Agreement with First Energy (from July 1st to July 15th).
PUBLIC NOTICE: Cleveland City Council will hold a public hearing to discuss Ord. No. 680-11 on Monday, June 13th at 1:00 pm, Mercedes Cotner Committee Room 217, 601 Lakeside Avenue.
On Wednesday, June 1st Cleveland City Council’s Public Utilities Committee heard legislation that would authorize participation in the proposed AMP Ohio Fremont Energy Center (AFEC) natural gas combined cycle generation plant and settlement of expenses for the cancelled AMPGS coal fired plant in Meigs County.
Council's Public Utilities Committee developed a list of follow-up questions that are being responded to currently. The list is provided below.
Major concerns regarding the legislation is first and foremost the short period of time Council has been provided to review and vote on the contract. AMP entered into a purchase agreement with First Energy for the AFEC on March 11th. The subscription period began on March 15th and is scheduled to end June 15th. The current closing date for the agreement with First Energy is July 1st.
June 1st 2011 Committee hearing –
AMP Fremont Energy Center (AFEC)