If plant sale fails, vote?

ESCANABA – While the sale of Escanaba’s power plant slowly progresses, the city continues to make plans in the event the deal doesn’t go through.

As a precaution and in preparation of the plant not selling, city officials are contemplating letting the voters decide whether the facility should be disposed of or not. An update on the process was given during Wednesday’s city council meeting with the Electrical Advisory Committee.

Ballot language must be adopted and approved by Aug. 13 to put the issue on the November ballot, explained City Manager Jim O’Toole. If the voters decide against disposing of the power plant, the sale of the property will be stopped, he said.

For more than a year, the city has been in the process of selling the power plant to Escanaba Green Energy for $1.6 million. A sale agreement has been reached, but EGE has had setbacks with acquiring the $30 million needed to buy the property and convert it to burn biomass.

A company representative informed council Wednesday that a sale closing date will not be known until the project’s lenders are in place.

O’Toole said, “While Escanaba Green Energy still moves forward, we have to secure and provide a backup for the people, and at this point, it’s a referendum in my opinion.”

Escanaba is selling the power plant because it is less costly to purchase energy from a supplier compared to generating its own electricity by burning coal.

Escanaba is currently buying power from NextEra, an energy supplier from Juno Beach, Fla. The plant is being operated and maintained by Pro Energy Services, Inc., of Sedalia, Mo.

Operation costs are being reimbursed to the city by the Midwest Independent Transmission System Operator, Inc. (MISO), a regional transmission organization.

MISO is paying $3.7 million from June 15, 2012 to June 14, 2013 for the city continuing to operate the power plant as a regional power source. A second “System Support Resource” agreement has been filed to continue MISO’s funding, noted O’Toole.