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February 14, 2013

KITCHELL: IMPA with a twist best LMU option

— One of the most famous quotes in the world is that “In war, truth is the first casualty.” That also appears to be the case with the last week of discussions about the future of the Logansport Municipal Utilities.

Last Tuesday, Mayor Ted Franklin said on “Talk of the Town,” a local radio program that he didn’t want to explore the option of joining the Indiana Municipal Power Agency, which Logansport created in 1980, because of problems he had learned about at its brand new Prairie State plant in southern Illinois. As it turns out, the information he received about rate increases for IMPA cities he claimed would hamstring economic development in Indiana cities was erroneous, according to IMPA’s Roger Merriman. In fact, IMPA has its rate structure in place for the day when Franklin is long since past retirement age. In fact, the operation of the plant will not do what Franklin, citing an unsubstantiated Internet report, claimed it would do.

Franklin’s comments came a day after LMU Utility Superintendent Paul Hartman said at a city council meeting that the delivery grid owned by Duke is an obstacle in delivering cheaper wholesale power rates to Logansport. But IMPA has that base covered, too. Delivery costs for power are absorbed by the agency as a cost of doing business.

What this means is this: IMPA power rates are competitive and Logansport remains in the scant minority of Indiana communities with power plants that isn’t an IMPA member.

Although I have no opposition to synthetic fuels and the development of alternative energy sources, the current proposal doesn’t work for Logansport. It could be incorporated into another proposal that would lower rates and maintain LMU and its employees. There are reasons to like an endless source of fuel that may reduce landfill space, but there are reasons not to like this proposal before the city. Here are some:

1. A required 6,000-ton a day in trash that will be needed to run the plant, just to provide all the electricity for Logansport. Even with rail traffic, estimates indicate it would take over 100 Logansports to provide enough trash for this proposal. Do we really want to see trainloads of trash coming through Logansport every day?

2. Public health. The problems hundreds of railroad cars or truck would possibly create over the long run could include odor and vermin. If done poorly, an incineration plant could even affect property values.

3. Economic development. What jobs at a trash-to-energy plant would pay is unknown, as is the quality of the jobs.

4. Out clauses. How would Logansport exit out of an agreement with Pyrolizer if things don’t go well? How would Pyrolizer exit if it wanted out? Is either option possible? Nobody has said.

5. Rates. If LMU will hold the majority of stock in a public/private corporation that runs an incinerator, who will determine the rates and will the meeting where they are approved be open to the public?

Joining IMPA, with a twist, would make sense, and here’s why:

1. Logansport would be able to maintain its existing Race Street plant without removing the boilers. Peru, which is an IMPA member, maintains its boilers and is paid $4,500 a month in standby income from IMPA to do it.

2. IMPA rates are stable because IMPA has a larger capacity to purchase it and distribute it. IMPA rates apparently haven’t hurt Indiana cities because the number of members has nearly doubled since 1994 to nearly 60 communities.

3. Retain LMU employees to operate a Pyrolizer incinerator or alternative energy systems including hydroelectric power at the 10th Street location. This is the twist: Pryolizer would produce peaking power for Logansport based on its ability of trash fuel, which at this point, is a huge unknown factor for a plant opening in four years.

4. Rates for local industries. Based on the current contract LMU has with Duke, rates for local industries will likely increase in the next two years. IMPA has renegotiated Duke contracts to lower rates and has recently in Covington. Unless it can here, LMU ratepayers will be in the middle of a national recovery paying higher rates that will make them less competitive than neighboring Peru which has two four-lane highways to Logansport’s one. The Pyrolizer proposal does nothing to modify the existing Duke contract. IMPA can.

It’s time to be honest about the bottom lines in utilities and put the pubic good of utilities ahead of personal agendas.

Dave Kitchell is a columnist for the Pharos-Tribune. He can be reached at ptnews@pharostribune.com.

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