Power plant sale financing process continues
ESCANABA – Financing to purchase Escanaba’s power plant continues to move forward for the company buying the facility, the company president assured the Escanaba City Council during a joint meeting with the Electrical Advisory Committee (EAC) on Wednesday.
“This deal is very much alive and very much doable,” said Charles Detiege, president of Escanaba Green Energy (EGE), which is buying the power plant for $4.4 million.
EGE and the city began working on the sale more than two years ago. Since then, several unexpected delays have arisen, mostly due to EGE’s financing process to borrow $36.5 million to buy the plant and pay for the conversion of the facility from coal-fueled to biomass-fueled.
During Wednesday’s regular meeting of council and the EAC, Detiege presented an update on EGE’s loan process. He began by apologizing for not meeting the most recent date to close with the city last Friday.
There was a condition EGE could not meet regarding its loan financing, explained Detiege, adding the company has now met the condition and the loan is moving forward. He declined to say what the condition was due to confidentiality issues.
Detiege also said he wanted to squelch “a strong rumor” going around claiming EGE had lost all its financing.
“That is not true,” he said, adding EGE expects its loan-closing documents to arrive next week.
Following Wednesday’s meeting, Detiege told the Daily Press, “The financing is still going to happen. Once we close on our loan, shortly after we’ll close with the city.”
Escanaba is selling the plant because it is less expensive to purchase energy from a supplier compared to self-generation.
During a city-wide election on May 5, voters granted council the authority to dispose of the plant if it does not sell and if the facility’s current operational expenses cease to be paid for by Midwest Independent Transmission System Operator, Inc.
In other business Wednesday, council approved the purchase of three voltage regulators at the city’s west side substation for an amount not to exceed $150,000, as budgeted.
Council also approved the purchase of additional LED street lights along Ludington Street for $95,843, as budgeted. Last June, the city installed 16 LED street lights at the east end of Ludington Street.
Council agreed to buy 1,000 to 2,000 tons of coal from Upper Lakes Coal Company in lieu of coal that was more expensive and was not arriving as promised from another supplier.
A coal storage and transportation agreement between the city and Upper Lakes Coal was also updated and approved. Upper Lakes Coal stores coal for the city as its dock in Gladstone.
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Jenny Lancour, (906) 786-2021, ext. 143, email@example.com