Environmental

New Financial Report Reveals CWLP Coal Plant Drained At Least $41 million From Springfield, Il City Budget


SPRINGFIELD, Ill. –(ENEWSPF)–January 15, 2015.  A financial analysis released today by Synapse Energy & Economics found that City Water & Light and Power’s (CWLP) operation of Units 31 & 32 at its Dallman coal-fired power plant has drained at least $41 million from Springfield’s city budget in recent years and will continue to hinder CWLP and the city’s financial future. Synapse’s report came out in advance of CWLP’s budget presentation to the Springfield City Council on Thursday evening. The report’s findings stand in stark contrast to figures presented recently by CWLP Chief Utility Engineer Eric Hobbie to the Springfield Council.

“Our financial analysis found that CWLP’s operation of Units 31 & 32 at its Dallman coal-fired power plant will continue to cost the city of Springfield money for at least the next decade,” said Tommy Vitolo, Energy Economics Expert and Report Author, Synapse Energy & Economics. “CWLP also failed to account for expected EPA safeguards in its projection for its future operations.”

In 2012, the City of Springfield fell into technical default on CWLP’s debt and then proposed a series of rate hikes, raising rates 6.75 percent between 2012 and 2013. CWLP is on track for a second credit default this year, potentially as soon as February.

“CWLP is in the red and ratepayers simply cannot afford to let CWLP drain more money from the city to continue operating these aging, costly coal units,” said Scott Gauvin, Vice Chair of the Illinois Sierra Club’s Sangamon Valley Group. “The City will save tens of millions of dollars by phasing out the oldest units at the Dallman coal plant. The City Council needs to make smart choices, beginning with the proposed CWLP budget.  If CWLP defaults again, it will threaten the bond rating for the city and jeopardize public services in Springfield.”

The Sierra Club retained Synapse Energy & Economics to conduct a financial review of CWLP’s operations of Units 31 & 32 at the Dallman coal plant.  In conducting this analysis, Synapse reviewed CWLP’s financial documents and a December 2013 Environmental Compliance Study by consulting firm Burns & McDonnell that was commissioned by CWLP.

Principal Findings From Synapse Report:

The Burns & McDonnell report did not consider the costs of several upcoming environmental safeguards, including limits on carbon pollution and smog reductions.

Ceasing new investments in Units 31 & 32 and preparing for imminent retirement is the prudent course of action for CWLP; doing otherwise will ultimately force higher rates upon CWLP’s customer owners.

Units 31 & 32 are not needed for their generating capacity, as noted by the Burns & McDonnell report. CWLP owns enough generation that it can meet its customers’ needs without Units 31 & 32.   

  • Units 31 and 32 at the Dallman coal plant were built in 1968 and 1972 respectively, and are estimated to need at least $10 million in upgrades in the next few years to meet current public health standards and for maintenance of the units. In November, residents delivered more than 1,000 petition postcards making the case to the Springfield City Council that CWLP’s Dallman coal plant’s Units 31 & 32 have run past useful life and should be phased out so CWLP can protect Springfield’s financial health.
  • According to the Clean Air Task Force, the Dallman coal plant is a major threat to the health of Springfield residents, spewing pollution at levels that contribute to an estimated 79 asthma attacks and 5 premature deaths every year. The Dallman coal plant poses a threat to our water, too. CWLP disposes of toxic coal ash in unlined ponds at the Dallman plant.  In 2010, EPA found arsenic groundwater contamination at the Dallman ash ponds at nine times the Safe Drinking Water Act levels.
  • “Springfield’s financial health and public health are damaged every day that CWLP operates its outdated Dallman coal-fired units,” said Andy Knott, Campaign Representative with the Sierra Club Beyond Coal Campaign.  “It is in the city’s best interest for CWLP to phase out the uneconomical Units 31 & 32.”

CLICK HERE TO VIEW FINANCIAL REPORT ON CWLP

Source: www.sierraclub.org


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