CLEVELAND — In its materials promoting its plan to build a garbage incinerator at the Ridge Road Transfer Station, Cleveland Public Power (CPP) says that the alternative to building the facility is to “keep doing what we are doing,” including “continue buying 99.9% of our power from the market.” CPP also says that it needs to build the incinerator to “obtain electric generation that helps meet the City’s AEPS [Advanced Energy Portfolio Standards] goals for CPP.”
However, in recent years, Cleveland Public Power has in fact already made the decision not to continue buying 99.9% of its power from the market. Since the fall of 2007, CPP has come to Cleveland City Council to get approval to buy into a number of energy generation sources being built by American Municipal Power, arguing that it does not want to rely on the market for its electricity sources.
With Council approval, CPP has entered into long-term “take or pay” contracts for various generation facilities. “Take or pay,” a form of financing that has become notorious due to its potential risk to municipalities, means that the city is taking the financial risks for building and operating a portion of these facilities, no matter what the cost and whether or not they produce power.
Like all utilities, CPP makes projections for several types of power, including “baseload” power (which runs 24/7), “intermediate power” (16 hours each day/5 days per week), and “peak” power (usually characterized as power needed during the hottest days of the summer).
CPP’s baseload power is between 160-180 megawatts per year, and their peak load is 330 megawatts. With the take or pay contracts it has already signed, Cleveland Public Power is currently planning on getting at least 75 megawatts of baseload power and 60 megawatts of intermediate power that does not come from the market. Most of these new plants are slated to go on line by 2013.
What generation facilities has CPP bought into already?
CPP has signed take or pay contracts for 50 megawatts of power from AMP’s new hydro plants on the Ohio River, and says this power will be available to the city by 2013. The hydro power meets the city’s definition of “advanced energy,” and will allow the city to fully meet, and likely surpass, its own standard of purchasing 15% of its power by renewable sources by 2015. CPP does not need a municipal waste incinerator to meet this standard.
In 2007, CPP signed a take or pay contract for 25 megawatts of baseload power from the Prairie State coal plant currently under construction in Illinois.
Last year, CPP signed a take or pay contract for 60 megawatts of the AMP Fremont natural gas plant, which began commercial operation this week. This power is characterized as intermediate power, though AMP CEO Marc Gerken told Martinsville, VA City Council last year that if the price of natural gas continues to go down this could even become viable as baseload power.
CPP also signed a take or pay contract in 2007 for 80 megawatts of power from AMP’s proposal to build a coal plant in Meigs County, Ohio. Opponents of the plant warned that the new coal plant would be both an environmental and an economic mistake. The plant was cancelled in November 2009 because it became too expensive. The City of Cleveland is liable for up to $8 million in costs for this plant, for which they will receive not even one megawatt of electricity.
— Sandy Buchanan, Executive Director, Ohio Citizen Action