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June 2012
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Prairie State performance helping PPS

By DAVID ZOELLER dzoeller@paducahsun.com

Paducah Power System officials are encouraged by the performance of the Prairie State Energy Campus, which is meeting the local utility's projections at the midpoint of the current fiscal year.

Prairie State, the Illinois coal-fired power plant that is the primary source of power for PPS, has been operating at an average capacity factor of 79 percent from July through December 2016, according to Dave Carroll, PPS director of finance and administration.

The utility's budget projection for all of FY '17 was an 80 percent capacity factor.

"They're running slightly below what we had budgeted," he said. "But overall we've had some positive things that have happened like market prices increasing (for power PPS can sell), so we're actually better off than we thought we would be at this time of the year. If they average 80 percent over the (fiscal) year, then we're right on target."

Capacity factors compare how much a power plant produces with what it would have produced had it run at full power for a specified period of time. Prairie State operated at 93 percent in July; 70 percent in August; 97 percent in September; 78 percent in October; 37 percent in November; and 100 percent in December.

A planned outage in November accounted for that month's low factor, Carroll said.

"Any time that (planned outage) happens you know it's not going to be a good month," he said. "It's part of your plan, it's part of the budget. I know with our budget process there are going to be bad months. Any time Prairie State has a planned outage our power costs are going to go up."

According to Gary Zheng, PPS general manager, Prairie State has shown positive signs in recent years in terms of operating capacity.

"If you look at the last three years you can see their performance has increased quite a bit, from 60-70 percent to nearly 80 percent last year," Zheng said.

"I wouldn't say it's perfect for us, but it's getting better every year."

Last June, Carroll projected a small decline in both revenue and expenses for FY '17. Total revenue was projected at approximately $77 million and expenses for generation and purchased power were projected to be just over $49 million.

"We're doing pretty well (compared to budget) so far," he said. "Our kilowatt hour sales are running a little bit higher than what we projected and our expenses are lower."

In addition, "We have seen an uptick in prices in the entire (power) market, not just Prairie State," Carroll said. "We've seen the entire market actually come back some. We have seen less supply in the market, which should have a positive effect on the price. Since we generate more than we use, higher prices are to our benefit."

The past poor performance of Prairie State, and PPS' large debt as an owner, resulted in electric rates believed to be the highest in the state or close to highest. However, the past two years PPS has lowered its Power Cost Adjustment - the variable cost added to the base rate imposed to offset the utility's cost of buying wholesale power.

The PCA is reviewed annually at the beginning of the fiscal year. Officials have indicated a desire to continue to lower the PCA in July and continue to look for ways to reduce overall power costs.

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