Power Plant Owner Sues Lawrenceburg, LMU Over Threat To Cease Water, Sewer Service

The natural gas power plant owned by Lawrenceburg Power, LLC says it can run on the energy it generates and no longer wants to pay Lawrenceburg Municipal Utilities.

This last paragraph of this story has been corrected to reflect the correct city council vote on the city's electric rate ordinance affecting Lawrenceburg Power LLC.

(Lawrenceburg, Ind.) - A Lawrenceburg power plant owner is suing the city and Lawrenceburg Municipal Utilities in federal court.

Lawrenceburg Power, LLC owns and operates the natural gas power plant located along U.S. 50 at State Road 48. The company notified LMU in late 2017 that it plans to terminate a 2015 contract effective January 1, 2019 because it self-supplies its own electricity for plant operations.

The 2015 agreement was reached by the power plant’s former owner, AEP GenCo, to resolve a lawsuit with LMU and the city. Under the agreement, LMU agreed to furnish the plant with “some form of deemed electric power plant service” and AEP GenCo agreed to make payments to LMU. Lawrenceburg Power says the contract permits them to back out of the agreement with one year’s advanced notice.

In a lawsuit filed last month (PDF file), the plant owner claims LMU has threatened to cease providing water or sewer service to the plant if it doesn’t stick with the 2015 electric agreement. A lack of sewer and water would effectively force the plant to shut down, Lawrenceburg Power LLC argues in its complaint.

“The plant itself does not have any electrical interconnection to the electric distribution system owned and operated by LMU. As a result, LMU does not and cannot directly supply the Plant itself with any electricity required for station power,” the complaint states.

The company explains that it uses a fraction of the electricity generated at the plant to power its own lights, heating, air, computers, and controls. Even when the plant is not generating, it obtains electricity from its direct interconnection to the Federal Energy Regulatory Commission-regulated high voltage transmission system.

Lawrenceburg Power does admit that some of its facilities not used in the generation of electricity at the plant do receive lower-voltage retail service from LMU, “and that other service is not at issue in this case.”

Lawrenceburg Power wants a federal judge to prohibit the city from refusing water and sewer service as the electric agreement expires.

“Any such actions by the City or LMU in response to Lawrenceburg Power exercising its right to terminate the Contract and exercising a FERC-approved right to self-supply its station power would be preempted by the FPA, FERC’s orders issued thereunder, and the FERC-approved PJM Tariff.”

Mayor Kelly Mollaun declined to comment on the litigation.

“I don’t feel comfortable responding since it’s a pending lawsuit,” he said Thursday.

The city and LMU have requested additional time to file a response with the federal court.

Last month, the city council voted to change the electric rates ordinance to raise rates affecting only one customer, Lawrenceburg Power. 

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