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February 10, 2013

PUBLIC FORUM: Utility manager responds to letter

— This letter is in response to Mr. Terry Sarver’s recent forum letter in which he expresses support for the LMU power plant project. In the letter, Mr. Sarver made reference to “our neighbors who belong to the Indiana Municipal Power Association,” and offered further comments regarding the Prairie State coal plant “boondoggle.” I took this to be an indirect reference to Peru Utilities, as we are your neighbors and we do belong to IMPA. In view of this, I feel compelled to offer some facts to counter Mr. Sarver’s statements.

With respect to Prairie State, the project is anything but a boondoggle. It is actually a state-of-the-art pulverized coal electric generation facility consisting of two, 800 MW units, of which IMPA owns 200 MW.  Prairie State incorporates some of the most advanced environmental control technologies in the world. Both units are in commercial service and operating outputs and efficiencies are proving better than predicted.  The project cost includes a coal mine located adjacent to the plant and a 30 year supply of coal reserves.  The all-in cost of power at the plant bus is 4.9 cents/kWh at a 90% capacity factor. Finally, Mr. Sarver stated that Peru Utilities would have to raise rates as a result of Prairie State. In reality, the costs of Prairie State are fully included in the current IMPA wholesale rates. In 2012, Peru Utilities paid an average of 6.5 cents/kWh for wholesale power and transmission, which included Prairie State.

From what I have read, I get a sense that Mr. Sarver would like to portray IMPA as the enemy. If so, I am perplexed by this as IMPA was created in 1980 for the specific purpose of ensuring that municipal utilities in Indiana had direct control over their wholesale power supplier and resulting costs. In fact, Logansport was one of the original IMPA founding members. IMPA now serves 59 of Indiana’s 72 municipal electric utilities, with six new members joining in the last 12 months.  Speaking as a member of IMPA, I’m certain IMPA would stand ready to offer its support to Logansport if needed.

Roger Merriman, general manager of Peru Utilities

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