ESCANABA - Escanaba City continues to wait for its power plant to sell as the buyer presses on to secure funding for the purchase and renovation of the facility.
Escanaba Green Energy (EGE) has been planning to buy the power plant for nearly two years. Recent setbacks delaying the sale have been due to the lending process to secure the $36.5 million needed to buy the coal-fueled facility and convert it to burn biomass. The city is selling the plant and property for $4 million.
During Thursday's council meeting, City Manager Jim O'Toole read a letter from EGE President Charles Detiege, updating council on the company's latest developments with financing.
EGE was set to borrow $1 million from AEM Ventures LLC to serve as a deposit on the $36.5 million loan from Centurion ISG Europe Limited. The Centurion loan will pay for the plant and the biomass conversion.
In Detiege's letter, dated Nov. 21, he states AEM withdrew from the project because the firm could not reach an agreement with Black Diamond Investments which was coordinating the $1 million loan between EGE and AEM.
In anticipation of AEM's withdrawal, EGE had arranged for an alternative provider of the deposit, stated Detiege.
"When AEM withdrew, EGE immediately concluded a commitment with this alternative investor," he stated, explaining the new investor required EGE make two deposits to cover the costs of documentation and the closing of the loan.
"The first deposit has been made and as a result, this investor has initiated the transfer of the million dollar deposit amount, kicking off the loan," Detiege said. He added a closing date will be provided to the city as soon as possible.
No comments were made by council following the reading of EGE's letter by O'Toole. After the council meeting, the Daily Press asked O'Toole where the city stands with the sale of the power plant.
"We're waiting for EGE to give us a green light on their financing so we can go forward with the closure."
Escanaba is selling its power plant because it is less expensive for the city to purchase energy rather than generate its own electricity using coal.
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Jenny Lancour, (906) 786-2021, ext. 143, email@example.com