Progress made in power plant sale
ESCANABA – The sale of Escanaba’s power plant is getting closer to materializing as city officials and Escanaba Green Energy (EGE) meet today to determine each party’s responsibilities in the upcoming closing process.
“Our attorney is preparing the ‘closing checklist’ which outlines what actions and documents need to be completed and by whom,” stated City Manager Jim O’Toole Thursday.
“We will be working diligently to expedite the closing of the sale between the City of Escanaba and Escanaba Green Energy,” he added.
EGE is scheduled next week to sign its loan to purchase the plant; funds are expected to be received within the next two weeks, announced EGE President Charles Detiege at Wednesday’s joint meeting of the Escanaba City Council and the Electrical Advisory Committee.
“Our document signing with the lender is set for Tuesday and funds will be available the following week,” Detiege explained in a telephone interview with the Daily Press.
Initially, $1.6 million will be placed in escrow to purchase the plant and 17 acres of land, he said. The inventory, including equipment and coal supplies, will be tallied prior to closing the approximate $4 million deal.
Escanaba is selling the plant because it is less expensive for the city to purchase power compared to generating electricity by burning coal.
SInce Jan. 1, 2012, the city has been buying power from NextEra, an energy supplier from Florida. The plant’s generators remain operational to produce power as needed for the regional market.
EGE has been working with the city for more than two years to buy the coal-fueled plant and convert it to burn biomass. Several setbacks have occurred during EGE’s lending process to secure the $36.5 million to buy the plant and pay for the biomass conversion.
Detiege said he’s grateful EGE’s loan process is moving along. Next week’s signing will take place between EGE in Escanaba and the company’s lender in Oklahoma via the Internet.
“I’m excited to get this project going and bring something new to Escanaba,” he commented.
“Once we close the financing here within the next two weeks and put the money in escrow, it will be up to the city from there,” he noted.
In addition to doing title work, the city will submit a 14-day notice of the sale to the Midwest Independent Transmission System Operator, Inc. (MISO), a regional interconnection agency which regulates power sales.
Current MISO funding – reimbursements which have been made to the city to keep the power plant operational and available to the market – will be transferred to EGE.
In December 2011, the city sought MISO’s approval to shut down the plant. MISO denied the request and is paying Escanaba $3.7 million annually to continue operations on standby mode because the facility provides reliability and additional transmission for the regional market.
MISO can terminate this agreement with a 90-day notice.
While the sale of the plant remains to be the city’s priority, Escanaba will continue to pursue a May 6 vote of the people to allow the city to dispose of the facility if the pending sale falls through and current operational funding stops.
A town hall informational meeting on the referendum is scheduled for 5 p.m. Thursday prior to council’s regular monthly meeting at 7 p.m.
– – –
Jenny Lancour, (906) 786-2021, ext. 143, email@example.com