Logansport utility service board approves development agreement for power plant

The development agreement is between the city and Logansport Energy Group LLC, backed by France-based Total Concept Solutions, SARL. The firm is proposing to privately fund the development of a power plant in the city, the first phase of which is estimated to cost $803 million.

Logansport Utility Service Board members said at their monthly meeting Monday, Sept. 15, that they continue to have faith in Logansport Municipal Utilities ratepayers' future whether its through the proposed power plant or not.

"There's still work to do," said Jay King, a member of the utility service board.

The city approving its agreements with Logansport Energy Group doesn't guarantee the project, he continued, as the responsibility falls on the developer to arrange its financing after all of the necessary legislation is passed.

King said should it not work out, negotiations may need to be reopened with Duke Energy, which LMU currently gets about 70 percent of its power from, or from some other provider. He requested LMU Superintendent Paul Hartman brief the board with monthly updates on possible backup plans, which Hartman agreed to.

Todd Miller, another member of the board, said the reason he's been comfortable with the proposal has been the contingencies outlined in the project's power purchase agreement. That agreement would require Logansport Energy Group, should it go bankrupt after the agreements are finalized, to cover the difference of LMU having to buy electricity elsewhere for the two years the utility would have to negotiate a long-term agreement with another firm.

"I feel like it's covered in here," Miller said of the contingencies outlined in the agreement.

Marty Monahan, president of the utility service board, said he has faith in the project because he trusts the consultants and lawyers hired to assist with it.

"I wouldn't hesitate for a moment to have them do this for me if it was my money," he said.

Several attendees of the meeting expressed their opposition and skepticism toward the project.

Sara Walthery said she didn't like the anonymity surrounding the developer. 

While Total Concept Solutions selected Dick Dilling, president of Logansport-based Dilling Group, Inc., to be its local representative, the identities of others associated with the firm have yet to be made public.

"This project bothers me," Walthery said. "It bothers me a lot."

The plant would be powered by natural gas with the possibility of taking on refuse-derived fuel in the future. 

Mercedes Brugh expressed her opposition to the latter fuel source at the meeting, calling it a plan that wouldn't attract investors and would increase pollution levels that aren't enforced well enough by the U.S. Environmental Protection Agency and Indiana Department of Environmental Management.

"Don't be deceived," Mercedes Brugh said. "When it's parts per million of tons and tons of emissions year after year, that adds up."

The development agreement will not include detailed plans for development until computer modeling allows for approval through state and federal regulatory agencies.

"There's too many blanks in these documents," said Jim Brugh at the meeting, going on to call the plan "a gamble."

The utility service board approved a power purchase agreement with Logansport Energy Group in May 2014 that sets an initial rate not exceeding 5.5 cents per kilowatt-hour. LMU purchased power from Duke Energy at an average of 7.67 cents per kilowatt-hour during May, June and July 2014.

Logansport City Council approved the agreement the following month. 

Jim Brugh said there should be some kind of cost study involved backing up that the plant could achieve that initial rate.

"What you're doing is unprecedented," he told board members. "It's not thought out."

Logansport Mayor Ted Franklin said Jim Brugh's comments were political and had nothing to do with the power plant and questioned why the opponents didn't publicly display their opposition to the pollution created by LMU's coal-powered plant in town.

Logansport City Council approved the development agreement on first reading Thursday, Sept. 11.