ESCANABA - Though the sale of the Escanaba power plant continues to be delayed, the city administration remains hopeful the sale will be finalized sometime this fall.
During a special meeting Wednesday, council approved the extension of the purchase agreement with Escanaba Green Energy to buy the power plant.
EGE failed to meet the Aug. 31 deadline to enter the required documents for funding into escrow; council extended the deadline for the fifth time to Oct. 9, with some added provisions, explained City Manager Jim O'Toole.
EGE must pay all of the city's legal costs from Aug. 31 to the date of closing or the termination of the agreement.
The city will also keep the $200,000 down payment received from EGE in the event the sale does not go through. EGE must also provide the city with a letter of commitment from its financial institution, said O'Toole.
"We're continuing to move forward in putting the power plant deal into escrow by Oct. 9 so that we can close later this fall on this sale," O'Toole told the Daily Press on Thursday.
O'Toole noted that during Wednesday's meeting, EGE representatives assured council the company is doing its best to bring the sale to a conclusion but, due to unforeseen circumstances with their lending institution, the process has been delayed.
"Escanaba Green Energy has been working diligently to meet the escrow requirements of the asset purchase agreement," O'Toole said. "We would like all the contingencies met by Sept. 20 so that we can continue tracking this forward."
O'Toole added that both parties are working hard to move the process along and make the transition happen as soon as possible.
Because of EGE's failure to meet a July 31 deadline, the city upped the selling price from $1.5 million to $1.6 million last month.
Negotiations have been taking place for the past six months between the city and EGE. Both parties agreed on and signed the terms of the sale contract in July.
Escanaba is selling its power plant because it costs the city less to buy power off the market compared to generating its own electricity. EGE plans to purchase the coal-fueled facility to convert it to burn biomass.