QUINCY, ILL. -- Quincy aldermen took no action at Monday night's council meeting on a proposed $10.2 million bond issue.
It would pay for the next phase of the city's proposed hydroelectric power project.
Representatives from all aspects of the project, as well as from the Quincy Public Library and the Oakley Lindsay Center attended the meeting.
Bond issues under consideration also would pay for projects at the library and at the civic center.
The council took no action on any of the three bond issues.
Before the council meeting, residents were able to voice their concerns during a public hearing.
Most of them revolved around the financial risk to the city.
Fourth Ward alderman Mike Farha wanted to have another public meeting on the hydroelectric project, but no action was taken.
A similar meeting will be held next Monday, August 24 at 6 p.m. before the regular council meeting to get the public's opinion on the proposed library and civic center bonds.
The following letter was sent to Quincy Mayor John Spring and Aldermen Steve Duesterhaus, Mike Farha and Tony Sassen on August 17, 2009:
The information conveyed this evening by Mayor Spring and the city's consultants on the hydroelectric project was most helpful. It was a good first step toward answering questions I have about the project, and I thank you, your colleagues on the City Council and Mayor Spring for organizing the meeting.
All of us appreciate the great amount of work that people of good faith have put into the project, and there appears to be a good number of positives in it. I want to assure you I do not oppose the project. I want to understand it - and what we are committing ourselves to as a community in the decades ahead.
As we approach the next phase, licensing, and the beginning of larger expenditures and investments, I believe it is reasonable to have the city's officers and their advisors speak directly to the people. As the Mayor this evening noted, aldermen have been kept informed. And news reporters have conveyed information. The most important group, Quincy's citizens, however, have not had a full opportunity to hear and be heard as the project has moved. Citizens have a right to redress their government. I believe they also have a right to address their government, to get their questions answered about what Quincy media are saying would be the largest public works program in the city's history.
I ask, Steve, that for your constituents you advocate the following with your colleagues on the City Council:
A series of four public hearings to be held within 30 days that will provide the citizens of Quincy ample opportunity to get answers to their questions about the project.
The postponement of passage of the bond authorization until the public hearings have been completed.
The appointment by the Mayor of an advisory committee of project-related experts who will serve as an "owner's representative" for the City and its constituents to assure accountability from all parties in the project.
Again, Steve, thank you for your role in advocating for this evening's hearing. Although it raised a few questions, it went a long way toward answering a number of those (please see the enclosed) I've had. I look forward to the opportunity to get answers to the rest.
Best wishes,
Reg Ankrom
1476 Hampshire
Quincy, IL 62301
cc: Hon. John Spring
Hon. Mike Farha
Hon. Tony Sassen
Questions
Re Quincy Hydroelectric Project
1. Please provide a brief narrative on the history of the hydroelectric project, including the benefits and risks you have considered.
2. When does the plan anticipate the hydroelectric plant to begin commercially generating electricity?
3. What is the MW capacity of the hydroelectric plant?
a. Will the capacity serve Quincy proper's projected electric demand and consumption?
b. Have we done an analysis of the city's load growth to determine adequacy of the capacity to serve into the future?
4. What is the anticipated all-in cost when completed?
5. What other options for power acquisition were considered?
6. Please quantify the cost per kilowatt of each option considered.
7. Please briefly explain why each of the other options was rejected.
8. Was the purchase of wholesale power considered?
c. What advantages and disadvantages were projected?
9. Have we considered rate structures at this point?
10. Please ballpark the estimated cost per kilowatthour for a residential customer at retail.
d. How does that compare to projected kilowatthour charge from existing power generation sources?
11. Is there a plan for possible expansion of the plant?
e. Is that built into the project?
12. Considering age and possible future replacement of the dams, how would that impact construction and operation of hydroelectric facilities?
13. Does the manufacturer of the generation equipment have other generating facilities by which performance and reliability can be reviewed?
14. Has discussion begun on who would build the facilities?
f. What qualifications do we anticipate will be required?
g. What will be required in the way of performance guarantees?
h. What indemnification will be required?
15. What is the expected life of the plant for purposes of both depreciation and retirement or replacement?
16. What is the financial structure of the project (i.e., ownership, debt-equity ratio, etc.)?
17. If the project is to be financed solely by debt instruments, what are the anticipated terms and conditions?
18. Will these be revenue or general obligation bonds or a combination of each?
19. If a combination, what percentage is expected to be general obligation bonds?
20. When will debt service on bonds begin?
21. If debt service begins before commercial operation begins, how will payment be made?
22. What impact, if any, will issuance of these bonds have on the city's ability to bond by revenue and general obligation for other needs in the future?
23. Are we assured that we will have enough bonding authority to see the project fully through?
24. May we see the list of grants, loans and other instruments expected to help with the cost of the project?
25. What assurances do we have that these have been encumbered or will be available when needed for the project?
26. What do we see as the risks of each?
27. May we see the business plan for the project, including:
i. Business model
j. Financials and pro forma
k. Risk analyses
l. Project and payment schedule and related cash flow requirement.
i. What revenue sources will be used for payments?
28. Do we have a plan by which we continue to measure cost-benefit during the course of the project?
m. Do we have an exit strategy if required at various points along the way?
29. Who are the parties said to be interested in:
n. The license
o. Partnership (or joint venture, etc.)
p. Purchases of power
30. Would any of these parties be interested in an equity position?
q. Would a partnership or joint venture with those expressing interest in ownership make sense?
i. Assuming some of the interested parties are utilities, would they be willing to assist in due diligence on the project?
31. The Klingner engineering firm is providing strong expertise in hydraulics of the project. Who is providing the electrical expertise?
r. What are that firm's qualifications?
s. Who is serving as the city's owner's representative for the project?
i. What are this person's qualifications?
ii. Would it make sense for the Mayor to appoint an advisory committee of experts for the conduct of the project?
32. Does the contract with Klingner Engineering define its advisory role?
t. What does advisory mean?
i. Does it include policy recommendations?
ii. Is it at arms-length enough not to "drive" the project?
iii. How is accountability provided?
33. If private parties are interested in participating in the project, does it make sense to determine the extent to which they are interested?
u. Would they be willing to buy the project from the city and commit to completing it?
v. Would it be beneficial to have them share the risk?
w. Would a public utility like Ameren Energy, required to have a percentage of green in its generation portfolio in the near future, be interested in a joint venture or partnership?
x. If parties include existing electric utilities, would it make sense to include them in a relationship to take advantage of their expertise in power production?
34. One speaker at the August 17 meeting noted factory closings had resulted in large amounts of electric supply, which has lowered wholesale electric prices. Are there opportunities for long-term power purchase agreements for this available supply?
35. When Mead-Hunt representatives indicated an interconnection study showed no problem in transporting electricity from the hydroelectric facilities, did the study include transmission, transformation and distribution systems?
36. Mr. Pohlman reported the GREDF study indicated positive cash flows. When?
37. With a mandate for Illinois's electric generation to have more green power, what reason did the Illinois Power Authority provide for not being interested in participating in the hydroelectric project?
38. Why was work suspended on Lock and Dam 20?
39. Are the turbine generators that Mr. Klingner reviewed in France full-scale commercial generators?
40. With apparent issues at Lock and Dam 22, why place a minimal number of generators there?
y. Is this a feasibility demonstration?
z. If so, who is funding?
41. What is the plan to pay off bonds for this second phase if the project proceeds no further?
42. If Mr. Klingner's timeline for studies, grants, etc., will take up to six months, what is the urgency for moving so quickly on the bond authorization?
aa. What impact will a month's postponement have?
43. Mr. Pohlman stated if he knew in 2006 what he knows today, he would not have proceeded with the hydroelectric recommendation. What does he mean?
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