Jasper Clean Energy agrees to provide extra funding for city fire department and security deposit in proposed lease
The City of Jasper continues to address the concerns of citizens during the lease negotiation. Today the city released more details concerning this process.
Jasper Clean Energy has agreed to donate $50,000 to the Jasper Fire Department and $25,000 donation annually for the city’s volunteer fire department.
According to Mayor Schmitt this is because the city does not want the project to become and undue burden on the Fire Department or the City of Jasper.
“This was a suggestion by Jasper Clean Energy.” Mayor Schmitt said. “They realize the stress and strains that cities and towns are under and tight budget constraints…This will help offset the public safety cost.”
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The money will be used to supplement training for the Jasper Fire Department in regards to the power plant if Jasper Clean Energy does move forward with the biomass project.
Issues have been raised by the opposition to the power plant regarding the city’s ability to provide utility service for the project. The city water treatment plant has the capacity and is permitted to provide up to 6.48 million gallons of water to Jasper. The city reports it is only utilizing 1/3 of its capacity at this time. This allows for an addition 4 million gallons capacity and the proposed plant will only utilize an addition 600,000 gallons per day. The Jasper Power Plant was the largest consumer of water when it was running at full capacity.
The wastewater treatment plant has the capacity to treat approximately 3.6 million gallons of effluent per day. It currently processes 2 million gallons per day and the project is expected to add 42,000 gallons to the current rate. The existing power plant used 35,000 gallons per day when it was operating.
Jasper also has the ability and permits to utilize water from Patoka River for the operation of its utilities if additional water usage is required.
The sale of water will provide additional gross revenue of $500,000 with a net impact of approximately $150,000. This is projected to help stabilize current water rates and reduce the need for future rate increases.
In regards to the security for the city in the event Jasper Clean Energy breaches the lease agreement. A letter of credit in the amount of $1.5 million would be provided during the construction phase of the power plant and during the operation of the plant Jasper Clean Energy would provide a $3.5 million line of credit.
An addition sinking fund of $1.5 million would be established with a local financial institute that would be funded with annual payments of $300,000 for a period of five years.
$5 million would be available for use by the city if Jasper Clean Energy is found to be in default or breach of the lease agreement. “Basically we can tear the power plant down with this fund if something were to happen.” Utility Service Board President Wayne Schuetter said. “Of course we have the option to look for other operators.”
The draft proposal of the lease is not available to the public yet but is expected to be available in the next few days. According to Sandy Hemmerlein, city attorney, the draft proposal is in the hands of the Jasper Clean Energy at this point and only after they review it and return it will it be made available to the public next week.
Mayor Schmitt also clarified during the press release that the investment in the remodeling and the improvement of the power plant and the support systems are all at the cost and expense of Jasper Clean Energy.
