Danville expects partnership to stabilize electricity prices
- January 1, 2008
by Heather B. Hayes
Worried by its reliance on rapidly rising and unstable prices on the wholesale market, Danville has decided to partner with American Municipal Power-Ohio (AMP-Ohio) to generate most of its electricity.
“We did not want to continue to be so dependent on the wholesale market, which has gone up nearly 100 percent in the last four years,” says Joe King, Danville’s assistant city manager for utilities, who adds that customers have seen rates rise 65 percent during that time.
With Columbus-based AMP-Ohio, Danville will be one of 122 member cities with a stake in three Ohio River hydroelectric plants and two coal plants being built in Ohio and Illinois. The arrangement is expected to save Danville $200 million over 15 years.
King says that AMP-Ohio will provide the upfront capital investment and financing. Danville will agree to purchase a certain amount of electricity to cover its share of the cost of building and operating the plants. The arrangement is scheduled to take effect in 2012.
Danville had the option of building another power plant and generating its own electricity, but King says partnering with AMP-Ohio offered a better deal. “We don’t want to lead anybody to believe that electricity prices are going to go down as a result, but we do think that this over the long-term is going to allow us to stabilize our prices,” he said.