Electric Deal Costly to Marceline

MARCELINE, MO — Marceline thought it was making a good deal in 2004 when it agreed to buy almost all of its electricity from the Prairie State Energy Campus. Instead, the contract has created a fiscal nightmare. The St. Louis Post-Dispatch reports that Marceline is expected to lose almost $1.4 million this year — equal to more than $600 for each of the city’s 2,200 residents. City officials want to negotiate an exit with Prairie State but don’t rule out defaulting on the contract. The U.S. Department of Energy data show Marceline’s average retail electric rates in 2011 were 14.4 cents per kilowatt-hour, the highest in Missouri and more than 50% more than competing Ameren Corporation’s rates in Missouri. For that reason, Marceline continues to buy all of its electricity from Ameren and will do so through 2016. The city is reselling its share of Prairie State generation back to the grid at a substantial loss. City officials will not consider raising electric rates further to offset those losses. The 1,600-megawatt Prairie State coal-powered plant in southwestern Illinois was conceived more than a decade ago by Peabody Energy Corp. of St. Louis. It ended up costing about $4 billion to develop — twice the original estimate.