Brian Cummins · Council considers authorizing participation in proposed AMP Ohio natural gas fired power plant and settlement of expenses for cancelled AMPGS coal fired plant in Meigs County

June 3rd, 2011

Contract represents $52 to $62 million, 35-year take-or-pay power purchase contract for 60 MW share of a 685 MW natural gas combined cycle generation plant.

[Original post is at:]
http://brian-cummins.blogspot.com/2011/06/council-considers-authorizing.html

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.

The authorization would allow Cleveland Public Power (CPP) to enter into a 35 year contract to purchase power from the plant as well as allow CPP to pay and settle its’ share of development costs for the unsuccessful AMPGS coal fired plant.

The authorization represents a contract for a 60 Megawatt (MW) share of the total 685 MW project, or a relative percentage (8.75%) value of the cost of the purchase of the AFEC, which equals: $574.7 million total project costs, for an amount of $50.3 million for the City of Cleveland’s share. An additional 25% “step-up” provision could increase The City’s subscription (from 60 to 75 MW) and the cost exposure to a TOTAL of $62.9 million.

The power purchase contract would also provide a discount to AMP participants that agree to a share in the new proposed gas fire plant. The total stranded costs of the AMPGS coal fired plant have been reported as $119 million. Cleveland’s share, according to AMP is $12.4 million.

AMP’s Board approved applying $34 million of the total cost of development of the AMPGS project to the AFEC project. The application of these fund balances has been stated to reflect development costs that can be applied to the new project based on work performed and related to the identified need and development of an intermediate and base load supply of power that was initially identified as a goal by AMP participants in 2002.

If Cleveland participates in the new project at a level of 60 MW, the $12.4 million stranded cost would be reduced to $7.5 million. Of the $7.5 million balance, CPP would be able to apply half the amount. $3.75 million to a 15-year payment term for power purchased from the AFEC project and the remaining $3.75 million would be paid out of CPP’s operating fund.

Resources:
Ord. No. 680-11
Executive Summary ORD 680-11
AMPGS/AFEC PowerPoint Presentation 6/1/2011

For a status of the legislation and list of questions and concerns raised by Council’s Public Utilities Committee see the original blog entry here.

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