December 5, 2012

KITCHELL: Why not consider wind instead?

by Dave Kitchell

— After years of speculation on the future of the Logansport Municipal Utilities electric generating plant, news last week that LMU is considering a switch to a trash-based pellet fuel is not surprising.

In fact, leaders deserve some credit for going outside their coal-burning firebox and exploring alternative energy sources.

With limited information available on a decision that reportedly will involve up to $500 million in investment, there are some important things for city leaders and LMU ratepayers to consider.

The first is that this proposed system apparently has no proven track record of success. Granted, it’s not the first time Logansport has considered this option. Bernard Perry, LMU’s one-time consultant, was asked to study this issue and the feasibility of it. That option didn’t involve trash pellets, but it did involve setting up the  trash stream to create fuel to run a generating plant.

What we don’t know is how this fuel and others like it will be subject to changing environmental regulations in the years ahead. As regulations continue to tighten on coal-fired plants such as Logansport’s and as cities such as Chicago become completely weaned away from coal as an energy source, the EPA likely will continue to make regulations indirectly affecting greenhouse gases more restrictive. If that happens, the pellet option could be an expensive one that could even become obsolete if emission issues are discovered that ban the use of pellets.

What we also don’t know is how much a private investor would expect to earn from a $500 million investment in a local utility company in northern Indiana. We also don’t know if LMU and ratepayers would be better served by issuing their own municipal bonds or bonding through Indiana Bond Bank and/or the Indiana Municipal Power Agency, which has more than 30 municipal utilities under its umbrella. If a new power plant for Logansport is funded through IMPA or the Indiana Bond Bank, it could reduce the cost of the bond issue and reduce rates for industrial, commercial and residential customers. It also could assure that Logansport would have a built-in customer for additional power it generates with a new plant.

What we do know is that wind energy does not have the environmental issues that any generating plant burning anything does. What we also know is that the Logansport-Cass County Economic Development Foundation just hired a new president who has a background in wind farming in her former capacity in White County. What we do know from that example is that property owners who agree to place windmills on their property will be receiving guaranteed payments that will be more predictable than the futures market for grains. That added value will be an asset for county property owners if a wind farm is the direction LMU takes for its future.

Sure, there are critics of wind farms, too. But what we also know is that natural gas is a back-up plan that could provide fuel when needed if windmills don’t generate adequate power supply. Logansport, as a previous consultant has indicated, could pursue a natural gas power plant powered by NIPSCO if necessary. But the cost of wind energy is clearly cheaper than the process that will be required to collect trash, manufacture, transport and burn trash pellets.

This is the time to have a truly grown-up discussion about our energy future because if Logansport is successful in securing a new plant that can generate a profit, money from it can be reinvested in the city for economic development, infrastructure, rehabilitation of rundown properties and a host of other civic improvements the community direly needs.

Which way will city officials go in the debate over natural gas, trash pellets or wind energy? When the matter of fuel costs is considered, the answer is simple, and it comes courtesy of an old standard from the 1960s trio of Peter, Paul and Mary: “The answer, my friend, is blowing in the wind.”

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