A class-action suit filed in Kane County Tuesday alleges misinformation was provided about a downstate coal plant that ultimately has cost Batavia consumers higher electric rates.
Nine Batavia residents and business owners listed as plaintiffs in the suit allege that consultants hired by the city made negligent misrepresentations "with respect to the construction, operation and other aspects" of the Prairie State Energy Campus and the cost of electricity generated at the coal plant, according to the 37-page complaint. They also claim the consultants made negligent investigations into the financial risks associated with the plant when the city agreed to help finance the project.
The suit lists five consultants — the Indiana Municipal Power Agency; IMPA Services Corp.; Rajeshwar G. Rao, president and chief executive officer of the Indiana agency; Sargent & Lundy LLC; and Skelly and Loy Inc. — as defendants and names 19 other entities, including Peabody Energy, the company that built the plant, and the City of Batavia, as respondents in discovery.
The defendants did not immediately respond to calls for comment Tuesday.
"Based on current available information, our clients believe that the resulting contract is causing a substantial increase in electric rates and sales tax in Batavia," plaintiffs' attorney Michael Duffy said in a statement.
Today, Batavia and many of the other communities that bought into the coal plant, including Geneva, are paying far more than neighboring cities for electricity.
In March, the Batavia City Council voted to raise the city's sales tax a half percent and raise rates on residential customers 6.5 percent in both 2014 and 2015, with a $4 increase to the monthly customer charge, to help make up for electric utility fund shortfalls related to its involvement in the Prairie State project.
The city has previously dipped into reserves and spent $2 million to shore up the utility fund.
According to the complaint, presentations made to the City Council by the defendant consultants in 2007 indicated that the cost of power from Prairie State Energy Campus would be approximately $46 per megawatt-hour. However, the actual rate charged has been much higher, reaching a rate of $179.92 per delivered megawatt-hour in November 2013, the complaint said.
"Defendants had knowledge as early as 2005 that $46 per MWh was not attainable," the complaint says, referring to an instance in 2005 when a Wisconsin company backed out of the energy project after it was told it could not pay a fixed rate of $46 per megawatt-hour because the price would pose a financial burden for the coal plant.
A public meeting to discuss the complaint is scheduled for Thursday at 7 p.m. at the Batavia Public Library, 10 S. Batavia Ave. A case management hearing is scheduled for Nov. 6 at the county courthouse in Geneva, according to court documents.
Information about how other Batavia utility users can join the suit is available online at prairiestateenergycampusclassaction.com and will be provided at the Thursday meeting.
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