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Batavia businessman files lawsuit over Prairie State electric project

Joe Marconi filed suit Tuesday

Published: Tuesday, Aug. 19, 2014 10:55 p.m. CDT • Updated: Wednesday, Aug. 20, 2014 9:24 a.m. CDT

BATAVIA – Batavia businessman Joe Marconi on Tuesday filed a class-action lawsuit in Kane County Circuit Court over the city's investment in the downstate Prairie State Energy Campus.

"We filed it because the electric rates in this town are so high," Marconi said Tuesday. "Our main objective is to get Batavia out of the contract they signed with Prairie State."

Named in the lawsuit are Indiana Municipal Power Agency; IMPA Service Corp., the consulting division of Indiana Municipal Power Agency hired by the city of Batavia to study the Prairie State Energy Campus project; Raj Rao, president and chief executive officer of IMPA Service Corp. and chairman of the Prairie State Generating Company Management Committee; Chicago-based consulting company Sargent and Lundy LLC, which was hired to study the quality and quantity of the coal at the Prairie State Energy Campus and Skelly and Loy Inc., a Pennsylvania-based consulting firm hired to study the quality and quantity of the coal at the Prairie State Energy Campus.

"They misled us," Marconi said.

A copy of the suit is posted at the website Marconi is hosting a community meeting about the lawsuit at 6:30 p.m. Thursday at the Batavia Public Library, 10 S. Batavia Ave.

The cities of Batavia, Geneva and Rochelle are named respondents in the suit. In 2005, the Northern Illinois Municipal Power Agency, of which Batavia is a member, agreed to a long-term power contract to purchase electricity from Prairie State.

Geneva and Rochelle are other members. Batavia City Administrator Bill McGrath said he could not comment on the suit.

Batavia aldermen in March voted 11-3 to approve an electric rate hike to address the electric utility's increased purchase power costs and the need for additional revenues. The hike raises electric rates in 2014 and 2015 in combination with a half-cent increase to the city’s home-rule sales tax. In addition, the option applies different percentage increases to energy and demand for commercial and industrial customers. City staff had recommended the option.

At that time, Batavia Public Works Director Gary Holm told aldermen the option would provide sufficient revenues and maintain comparable electric rates with surrounding utilities. Under the option, residents this year will see a 6.5 percent increase in their electric rates, plus a $4-a-month increase to the customer charge. In 2015, residents also will see a 6.5 percent increase in their electric rates.

Holm had said Batavia needed to increase electric rates for many reasons, including higher-than-anticipated construction costs related to the Prairie State project, the economic downturn and an associated unprecedented drop in the price of natural gas, to which wholesale electric prices closely follow.

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