Pharos-Tribune

February 5, 2013

Concerns remain over new LMU plant

Citizens, council members discuss details at recent council meeting

by Mitchell Kirk
Pharos-Tribune

— With the Logansport Municipal Utilities Service Board’s unanimous decision to recommend the city enter into a memorandum of understanding with Pyrolyzer to develop its new power plant, the issue was brought up at Monday’s Logansport City Council meeting, drawing questions and concerns from council members and citizens as talks continue to move forward.

As is customary at city council meetings, citizens had the chance to make comments before official business was conducted. While the speakers expressed a range of concerns, all four of them spoke to the amount of money the city has spent in consulting fees for the project.

Julie Kitchell mentioned the $111,453.79 of public funds that was itemized in documents recently released by the city specifying how money has been allocated to the consultants from June to November 2012. Among her concerns was the more than $6,000 spent on food and lodging for the consultants, along with the more than $350 spent on meeting space, which she said could easily be found in the city for free.

Kitchell also sought more information regarding why the consultants’ contracts were approved without any oversight from neither the public nor the city council.

Mayor Ted Franklin responded to this by citing the budget the council appropriates every year, which stipulates the possibility of extra funds may go toward contracts like these without the approval of the of the council itself.

When Kitchell attempted to address council members directly, she was interrupted by Franklin and told that the portion of the meeting was only for comments and that a separate meeting would have to be scheduled with the council where she could express her concerns.

Jim Brugh also addressed the use of public funds going to consultants.

Citing his experience in law, Brugh said, “It is unprecedented in business... to just hand somebody in an organization as small as we are — the city of Logansport — and not have an accounting.”

The city has currently spent $509,000 on consulting fees and Franklin recently said he expects to spend around $400,000 more.

“These consultants come and go,” Brugh continued. “Account for every single penny before you give $4 more, let alone $400,000 more because it is the public purse and this is serious.”

Pharos-Tribune columnist David Kitchell spoke on this matter as well.

“To date, we’ve simply invested hundreds of thousands of dollars in consultants and vendors and not the residential, commercial and industrial ratepayers we should be serving with this process,” Kitchell said.

Kitchell advocated that the city and LMU search out all alternatives for LMU’s need to refurbish. Among his suggestions were seeking solutions from the Indiana Municipal Power Agency, or IMPA, a wholesale electric power provider established in 1983. Kitchell said IMPA’s average electric rates are well below Logansport’s average as well as investor-owned utilities.

According to Pyrolyzer’s proposal, the plant it would develop would be owned by investors.

IMPA stated on its website that as of July 2012, its members paid an average of $11.44 less per month than investor-owned utilities.

“How Pyrolyzer will set its rates remains to be determined or even publicly explained,” Kitchell said. “Pyrolyzer is in the business to make money, but how much money it makes will somewhat be dependent on what it charges us.”

Kitchell also spoke on IMPA’s longstanding presence in the state compared to Pyrolyzer, which only has its pilot plant in Germany to back its claims.

While Franklin had denied Julie Kitchell’s questioning, he, council members and LMU Superintendent Paul Hartman seemed to indirectly address some of the speakers’ concerns when Hartman spoke on the Utilities Service Board’s decision to recommend the city enter into a memorandum of understanding with Pyrolyzer.

After Hartman addressed the council, Councilman Bob Bishop asked him if it would be possible to buy power from wholesale suppliers like IMPA.

Hartman said while wholesale power suppliers sell at considerably cheaper rates, it would have little effect on LMU being that it gets its electricity from power grid lines owned by Duke Energy, which sells at its own rate.

“Any wholesale power supplier that you buy from, you have to be able to get that power to your distribution system...,” Hartman said. “You still have to eventually get it over Duke’s lines and Duke can’t supply us with that total power right now and that’s the problem we’re in.”

Even after discussion on the plant ended, concerns among the council remained and will be addressed at the Feb. 14 meeting, where the council will have a vote on its first reading of the ordinance to enter into a memorandum of understanding with Pyrolyzer.

“I’ve got a lot of questions but I’m going to save them for then,” Councilman Bob Bishop said.

Mitchell Kirk is a staff reporter at the Pharos-Tribune. He can be reached at 574-732-5130 or mitchell.kirk@pharostribune.com.

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