The purchase power agreement, or PPA, for a proposed power plant in Logansport was released Friday.
The plant would run on natural gas first with the option of developing a renewable fuel alternative later on. Logansport Mayor Ted Franklin is negotiating with Total Concept Solutions Logansport Energy Group LLC.
The PPA calls for a commercial operation date of no later than Jan. 1, 2019, and sets an initial rate of 5.3 cents per kilowatt hour through 2020, after which rates will be adjusted in accordance with the annual Consumer Price Index — All Urban Consumers for the prior contract year.
All development costs and costs for necessary improvements will fall on the plant’s investors, including a reimbursement of the city’s investment in the project. The facility is currently estimated to cost about $803 million will have a capacity of 300 to 500 megawatts with a possible expansion of up to 2,000 megawatts.
The city and Logansport Municipal Utilities, or LMU, would receive 4 percent of the plant’s gross sales for a minimum of $5 million per contract year. All LMU jobs would be retained, more would be added and LMU would have the option of taking ownership of the part of the plant responsible for the first phase of 300 to 500 megawatts in the future.
The PPA states the developer must meet the energy requirements on the scheduled commercial operation date regardless of the facility’s completion. Should the developer fail to deliver, the city would receive cover costs for up to three contract years through a security instrument like a payment bond, insurance or letter of credit. The security instrument must be submitted in the amount of the projected annual variance for the next three contract years with a $10-million minimum. The projected annual variance is the estimated difference in cost of LMU’s supply requirements between the anticipated market price and energy rate.