The idea that Snapping Shoals’ and the other three EMCs’ sudden withdrawal was a planned move makes sense only if you believe P4G spokesman Dean Alford’s liberal reinterpretation of history. According to the Rockdale Citizen, Alford now claims that “The co-ops have always said their desire was the permitting of the plant and to find a strategic partner to own and operate the plant.”
In fact, until very recently, the EMCs said just the opposite. In the original permit application, from 2008, Power4Georgians said would it would “construct and operate” the plant. Alford gave similar testimony under oath in 2010:
Brian Gist, Southern Environmental Law Center: Now, when this facility is built, will Power4Georgians actually own the physical – the real property? Will they actually own the power plant?
Dean Alford: That is the plan at this time.
– Fall-Line Alliance et al v. Georgia Environmental Protection Division, September 21, 2010
Alford also testified that Power4Georgians (“six EMCs that have come together“) planned to bear the cost of moving the road around Plant Washington.
So what other questionable claims is Alford now making? In the Wednesday afternoon article Alford is also quoted as saying that “Snapping Shoals will receive a preferred option to purchase power once the plant is operational and a return on [$11 million in] capital invested.” This claim raises more questions than it answers.
First, who is making this guarantee? Supposedly Taylor Energy Fund, L.P., is propping up Plant Washington during the construction financing phase, but there’s no indication it has the resources or intent to construct the $2 billion-plus plant itself. The principal, Tim Taylor, has yet to go on record regarding his company’s commitments to the project. Little is known about the company other than it has a Colorado P.O. box and that its phone line in Georgia has been disconnected. Can such a company be counted on to finance the $2 billion-plus price tag for the facility? Is Taylor’s purpose simply to help secure the necessary financing?
Second, have the EMCs, in exchange for the “cut rate” deal, committed themselves to purchasing power from Plant Washington? If so, how do those terms compare to other available options, including from existing facilities?
Such a costly project would be a tall order for any investor. According to a June 2011 report released by Georgia Watch, power from Plant Washington will cost more than the projected electricity market rate for 2017, the year the plant would theoretically come online. And not just a little more: 54 to 103% more, due to a number of factors including increasing construction costs. Basic economics says you can’t sell a generic product (electricity) at nearly twice the going market rate. And if some buyers, like the EMCs that participated in P4G, are guaranteed discount rates, how will the owner re-coup its investment in constructing the plant?
Plant Washington’s proponents are now in the difficult position of trying to convince investors to put some skin in the game – which may be impossible as natural gas prices remain low and long overdue regulations force coal to reflect the costs it has long imposed on society at large. Investors will want to see commitments from EMCs to buy the power. What they won’t want to see is guaranteed discounts in a market that is already unfavorable to coal.
The reform candidates are calling on Snapping Shoals EMC to be more transparent, while its incumbent directors claim everything is going great: after all, rates are low. But if Snapping Shoals EMC has actually received a commitment of cut rates from Plant Washington, it should be transparent and release those details to its members immediately. And if Plant Washington never gets built, as seems increasingly likely, the EMC should explain how it intends to recoup the millions it has already advanced toward this unwise venture.
Much as the EMCs might like to pretend that the cessation of funding is all according to plan, we know better than to believe this is a coincidence – and we believe EMC members do, too. They deserve to know what new commitments have been made “on their behalf.”