New Direction For Illinois’ Only City-Run Coal Plant Brings Worries About Jobs, Economy
Michael Cassidy makes eight or ten trips a day driving a semi truck between the coal mine in Williamsville and the power plant on Lake Springfield. He travels the 16 miles mostly on Interstate 55 with around two dozen tons of coal.
“Just back and forth all day,” he said while taking a break at a gas station off the interstate. “It’s a little boring yes.”
Cassidy works for McLeod Express, a trucking company that has a contract with City Water, Light and Power to haul the coal it burns to bring electricity to its residents in Springfield, a city of about 115,000 people.
Springfield is the only municipality in the state to run its own coal power plant. But city officials are considering a plan to close three of its four coal generators after a report on CWLP’s future found that the cost to run them is more than what the utility can sell the electricity for on the wholesale market.
The report, done by The Energy Authority, Inc., recommended more renewable energy – either by building solar and wind farms, or by buying electricity at set prices from other companies.
And that has Cassidy worried about the future.
“There’s about 20 drivers assigned to CWLP that would, I guess, be put out of work or go haul something else,” Cassidy said.
Jobs At Risk
Then there are the 300 jobs at the mine, and around 180 jobs at the plant, though CWLP officials say not all would be at risk.
Springfield Mayor Jim Langfelder told NPR Illinois the city will put together a transition plan for the workers, which could include retraining, and placing some in other jobs with the city.
“If there are any, I guess, job misplacements, we want to give our workers an opportunity to find employment within the city of Springfield, preferably within CWLP or if there's other avenues that would be able to make that happen through attrition or things of that nature,” he said.
Still, what a plant closure means for jobs and the local economy is more complicated. A study of CWLP’s rates commissioned by the Greater Springfield Chamber of Commerce found that commercial customers paid 33% to 100% more for electricity than they would if they were served by Ameren. Residents paid around 7% more.
“Because rates are so high so therefore it goes directly to the business’s bottom line - dollars that they could invest in other employees – therefore growth; dollars they could invest in capital investment in their physical plant and location,” said Chris Hembrough, the chamber president and CEO.
Higher commercial rates can also make it more difficult to recruit new businesses to Springfield. Last year, the city, county and business leaders created the Lincoln Land Economic Development Corporation to attract new employers to the Springfield.
The study combined with another one from The Power Bureau, an Indiana-based firm hired by the chamber, found that the power plants are run uneconomically, and that above-market rates are being passed onto customers. The rate study showed that businesses are shouldering the burden, paying more so families can pay less.
Unlike Ameren and other investor-owned utilities whose rates are approved by the Illinois Commerce Commission, CWLP’s rates are approved by the Springfield City Council. The council last changed the rate structure in 2015, though Hembrough said concerns about high commercial costs predate that.
CWLP officials acknowledge prices for businesses are higher, but disagree with the analysis completed by The Power Bureau.
Utility spokeswoman Amber Sabin said rate comparisons between CWLP and Ameren are difficult because CWLP is public and produces its own electricity, while Ameren is investor-owned and only distributes electricity.
The analysis, she said, also doesn’t take into account the payments and other services CWLP provides to the city. For example, the utility provides information technology services for the city. The in-kind services plus the payment in lieu of taxes the utility pays the main checking account of the city totals around $15.9 million, according to Sabin.
Just As Important
Solomon Colors is based on the north end of Springfield, and makes specialty colored concrete mixes and equipment.
“My father always said we had the cheapest electricity because we had our own power plant,” said Adam Solomon, president and COO of the company. “Now it’s the opposite.”
The Power Bureau also offered a model to compare electricity prices. If Solomon was just outside of Springfield, they would have paid around $127,000 less per year. Solomon said that matters because the company is partly an employee-owned company.
“The more we make, it helps the company... and it helps the 100 employees of this plant,” he said.
David Waltrip, president of Mel-O-Cream, described a similar situation with his business. There’s a giant freezer at the company’s manufacturing facility in southwest Springfield that runs day and night to hold the frozen donuts they sell to grocery stores and gas stations in the region.
“We’re talking about tens of thousands of dollars a month extra for my business,” he said about what the higher electricity prices cost him. Waltrip said that money could be put toward buying new equipment or hiring more people or surviving a bad year.
Waltrip said he doesn’t want to see anyone in Springfield lose jobs.
“I don’t want to say my jobs are more important than CWLP jobs, but they’re not less important,” he said.
Waltrip remembers when low utility rates were a selling point for the city, and he’d like to get back to that.
“We’ve got a great thing with the utility. I love what it does, and I want it to be part of Springfield,” he said. “But you can’t run it inefficiently and charge whatever you have to to keep it running.”
Hembrough, with the chamber, and Solomon said they want Springfield to address higher rates with the utility’s long-term plan.
CWLP Chief Engineer Doug Brown said that’s possible.
“Our commercial rates are too high. It’s hard to compete with Ameren in the area,” Brown said at a meeting of the Springfield Citizens Club last month. “If we want to grow as a community and grow our businesses, that’s going to attract jobs in the future, we’ve got to have our rates lower. The only way to do that right now, with how the market is, is to retire our [older] units and start moving to purchase power.”
After CWLP comes up with a long-term plan, Brown said they want to do a cost of service study, which analyzes historical costs and projects future costs to determine revenue needs. From that, the utility would propose new rates, which the city council would have to approve. The whole process might not start for a year.
For now, Cassidy – the truck driver – said he’s taking a wait-and-see approach.
“In the meantime – just haul the coal... just keep it moving,” Cassidy said. “That way CWLP can keep the lights on.”