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Tuesday, March 9th, 2010

Celina says no to AMP

Hydroelectric power

By William Kincaid
The city of Celina will not participate in two hydroelectric projects that would have committed the city to 40 years of debt.
Under threat of veto by Mayor Sharon LaRue, the measure failed on its third reading after council President Jason King was forced to break a tie vote. King - citing his hesitance to commit to the long-term project - cast the deciding no vote.
Council members Angie King, Ed Jeffries and Bill Sell all voted no, while council members Myron Buxton, Mike Sovinski and June Scott voted yes.
Council member Jeff Larmore was absent.
American Municipal Power (AMP) - a nonprofit corporation that owns and operates electric facilities for its members - has entered into an agreement with the city of Hamilton to construct a $450 million Meldahl hydroelectric plant along the Ohio River. AMP hopes to have the electric plant running in 2014 and wants member communities, such as Celina, to agree to purchase its power for 40 years to pay down the debt to build the plant.
Meldahl, along with the currently-operating Greenup hydroelectric plant along the Ohio River, would have secured an additional energy source for the city, providing as much as 2.47 megawatts of the city's maximum daily use of 46 megawatts.
Mayor LaRue, who asked council members to think about the decision at a personnel and finance committee meeting last week, said the president of AMP met with her this week.
"However, I have not changed my mind on this project," LaRue said. "I again tell you this is not my decision. I do not support it and most likely will veto it."
Jeffries also stated his opposition, citing the city's financial obligation to AMP's canceled coal-powered plant in Meigs County. The city still does not know what it will owe for the failed plant.
"That's all money that's going to be charged back to our electric department," he said.
Jeffries said he didn't see the logic in obligating the city to the hydroelectric projects, which according to his projections would commit the city to $7.5 million in debt.
Sell, who had previously supported the proposal at a past meeting but voted no after lengthy discussion on Monday night, asked Celina Safety Service Director Rick Bachelor his opinion, to which LaRue jokingly said he could speak freely without threat of losing his job.
"Let me put it this way, the issue before you is whether or not you wish to add green power to the city's portfolio," Bachelor said.
Council members must ask themselves if they are comfortable to the exposure of market place prices, he continued.
"The market right now is good," he added.
The city obtains about 48 percent of its electricity from the market, with the remainder purchased through a consortium and other sources. The question is whether the city wants to add 5 percent in green power, Bachelor said, pointing out that once the economy recovers and energy demand increases, so will electricity costs.
"There is an abundance of natural gas waiting to be taken out of the ground," LaRue said.
Scott said the energy market is a crapshoot.
Bachelor said rejection of the hydroelectric projects would not be the end of the world for Celina, pointing out there may be other projects to participate in in the future, maybe even at Meigs County in the form of nuclear power.
"We are committed from now until forever to supply our customers with electricity," Sovinski said, explaining it's wise to secure as many long-term sources as the city can. "I look at the long-term commitment as a positive thing."
When asked by Buxton, Celina Community Planning and Development Director Kent Bryan said the rule-of-thumb is to have 50 to 60 percent of total energy secured through long-term assets. He said 25 percent should be derived from the market.
Forty years ago, the city's energy came exclusively from coal, Bryan said.
But since deregulation in the early '90s, everything has changed.
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