Congressman Dennis Kucinich (D-OH) today took to the House Floor to defend 2.5 million ratepayers in 217 communities across the Midwest who are overpaying for electricity thanks to bad deal with the Peabody Energy Company.
Peabody Energy Corporation convinced nine regional power agencies to become partial owners of a new coal plant in Southern Illinois. The deals specified that the municipalities could get stuck funding the plant even if it never produced electricity. After foreseeable and preventable cost overruns and subpar performance, ratepayers are now forced to buy electricity from the coal plant even though the cost of energy on the open market is much cheaper.
"Did Peabody Energy Company deliberately unload a bad investment on public power organizations serving 217 cities and villages across the Midwest? Congress must find out because Peabody Energy lured public power organizations into contracts that force municipal utilities to pay up to twice the market rate for electricity.
"At a time when private funding could not be had for new coal powered utilities, Peabody Energy unloaded 95% of its investment onto public power customers in what became an almost triple cost overrun, a coalmine that lasts 22 years instead of the 30 years promised, and an ashfill that was supposed to last 23 years and will last only 12-14 years.
"The contract which municipals are tied into forces them to pay for power 42% above the market rate, whether the plant is producing energy or not. Billions of dollars were issued for bond financing for the project and utility customers are vulnerable to huge costs for debt retirement. Wall Street wouldn't invest in the project, so Peabody went to Main Street, and now millions of public power customers will pay sky high electric rates...