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June 2012
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Accident may increase electric bills

BY DAVID ZOELLER dzoeller@paducahsun.com

Half of the generating capacity of Prairie State Energy Campus -- the Illinois-based utility which is the chief supplier of electricity for Paducah Power System customers -- will be off line for the next few weeks following an accident last Saturday.

According to Prairie State officials, one of the two 800-megawatt generators was taken off line for scheduled maintenance Saturday morning when a water storage tank overflowed, causing a high release of steam and water that damaged the siding and associated equipment.

"No explosion, fire or injuries occurred," the company said in a news release. "Neither the boiler nor the turbine generator was damaged. The unit will be returned to service after repairs are complete."

Whether the accident at the plant near Marissa, Ill., will have any impact on local utility customers is not yet known.

"It's too soon to say if it will have any effect on us," said David Clark, Paducah Power general manager.

The accident may have been a combination of operator error and an issue with the unit's digital control system, Clark said. A problem with a seal on some equipment in Unit 1 had been corrected, and officials decided to take the second unit off line for three days to make the same type of repair. It was during that process that the accident occurred, he said.

Results of an analysis of the accident are expected today, he said.

"They're talking about mid-June (to get Unit 2 back on line), so it's a setback," Clark said. "Is it a big setback? No. Is it a little setback? No. It's kind of an in between."

If temperatures stay relatively mild over the next few weeks there shouldn't be any problems, he said. If temperatures were to rise to the mid-90s and above, a decision might have to be made to run the company's gas-fired peaking plant on Schneidman Road, or perhaps buy more costly power on the open market to meet increased demand.

One factor that goes into determining a customer's bill is the Power Cost Adjustment. The PCA and base rate are combined to create the total bill customers pay for kilowatt hours. The PCA is tied directly to the performance and reliability of the Prairie State plant.

Having both Prairie State units off line for periods of time previously in a "debugging" phase, coupled with extreme weather this past winter, resulted in Paducah Power's PCA peaking at about 30 percent of residential bills.

Power companies project what their wholesale cost for power will be in the coming months and set the PCA. At the end of that period, they review it to see if their projections were accurate and consider adjustments. Paducah Power adjusts its PCA quarterly with the next review coming at the end of June, Clark said.

Obtaining long-term rate stability was the reason Paducah Power officials decided to stop buying electricity from the Tennessee Valley Authority almost 10 years ago. That goal is still obtainable, said Clark, predicting the PCA will average zero when the Prairie State reaches a plant availability factor of 85 percent.

Paducah and Princeton, Ky., make up the Kentucky Municipal Power Agency, one of several joint action agencies and cooperatives with ownership stakes in Prairie State. According to Clark, there are close to 200 cities or communities represented in ownership in several states.

Cost overruns in the construction of Prairie State and other problems have sparked complaints in several communities that signed long-term agreements with the promise of cheap, reliable power, according to several published reports. Prairie State was originally conceived by St. Louis coal company Peabody Energy, which has sold down nearly all of its stake in the plant.

According to the St. Louis Post-Dispatch, Peabody disclosed last year it received a subpoena from the Securities and Exchange Commission seeking information on the power plant. The SEC has not explained why the subpoena was issued.

Prairie State's former CEO, Peter DeQuattro, stepped down suddenly earlier this month, and the company's chairman, Duncan Kincheloe, took over on an interim basis. It's not know whether DeQuattro's resignation is related to the SEC inquiry. 

Contact David Zoeller, a Paducah Sun staff writer, at 270-575-8676.


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