Jamie Munks
The State Journal-Register
The Springfield City Council on Tuesday approved a contract with Arch Coal and held off on extending a redevelopment agreement with the Salvation Army for tax increment financing funds.
Aldermen voted 7-3 for a contract to purchase coal for a lower price, $35.90 per ton through 2020. City Water, Light and Power buys a substantial amount of the coal produced at the Viper Mine near Elkhart, which Arch owns.
The city has been paying as much as $45 per ton for coal, and the new price amounts to $57.9 million in savings for the CWLP. The savings in this fiscal year’s budget will be lower – the budgeted coal price included in the spending plan was $39 per ton. The approved contract with Arch also calls for the company to remove up to 60,000 tons of ash annually from the Dallman Power Plant for $5 per ton, a decrease from what the city has been paying.
The council Tuesday heard again from Foresight Energy, which submitted a competing bid for CWLP’s business, right up until taking a vote on the contract.
Foresight has argued that going with it would save the utility more than $30 million over five years. A company representative said a presentation two weeks ago by CWLP officials “artificially inflated” Foresight’s bid and overstated the capital cost for switching.
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Ward 7 Ald. Joe McMenamin, who voted for the Arch contract, commended Foresight’s work, and said it’s in the city’s long-term interest to have two competing mines open in five years, when it will again be negotiating a coal contract.
Joe McMenamin for Ward 7 