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11 16, 2012 by The Advocate
Over the objections of a New Orleans-based consumer group, the state Bond Commission gave approval Thursday to an Ascension Parish coal port facility expansion.
The approval allows Houston-based Impala Warehousing LLC to take out a $130 million tax-exempt loan for improvements at a facility on the Mississippi River near Burnside. The improvements are designed to help Impala ship 10 million tons of coal, primarily to international markets.
Bryan Keogh, chief financial officer for Trafigura Beheer BV, said the expansion will make the facility a top coal producer, increasing activity on the Mississippi River.
Trafigura Beheer BV is a Dutch trading company that owns Impala.
Eventually, Keogh said, the Ascension Parish facility will be able to receive coal by barge and rail.
Criticism of the project stems from fears that an increase in coal exportation could drive up the price of fuel for cooperatives, making monthly electric bills more expensive for customers in largely rural areas.
Casey DeMoss Roberts, executive director of Alliance for Affordable Energy, asked the Bond Commission to delay a decision on the loan.
The Alliance for Affordable Energy advocates for consumers on utility issues.
Roberts said financial markets consider such projects speculative because market conditions have changed.
Roberts said the loan carries a risk for Louisiana electricity customers, especially for those served by rural cooperatives who derive 80 percent of their energy from coal. She said those customers typically are the least able to sustain price increases.
“This project has weak financial characteristics,” she said.
Keogh countered that there is plenty of coal in the United States that can be produced for domestic use or export.
He said the project will create 120 new, permanent jobs.
Roberts asked that the promised economic benefits be put in writing.
State Treasurer John Kennedy summed up Roberts’ concerns as a fear that the cost of electricity will rise.
Roberts said that already happened in Colorado.
Kennedy said the U.S. has an 800-year supply of coal.
Roberts said that supply will decrease with global exportation.
Jim Harris, a spokesman for Keogh, said the volume of coal that will be handled at the facility is relatively miniscule.
Kennedy said all of the money involved is private. He said the loan came before the state Bond Commission because the company is entitled by the federal government to issue tax-exempt debt.
“There’s no state money here. This is not a state deal,” he said.
Roberts then asked for a month’s delay. The state Bond Commission ignored her request, voting without objection in favor of the loan.
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