Electromagnetic fields from high-voltage transmission lines (something like 765 kV), do not light everything around them on fire.
= = =
But the observer said the UFO was EMITTING enough energy to power a small city.
High-voltage transmission lines do not EMIT enough energy to power a small city.
Yeah, I am hung up on EMITTING
If you accept that plasma is surrounding the object and the amount of power (emitted) needed to create that plasma would be enough to power a small city (if the power were used that way), there isn’t anything inconsistent about it.
Also, electromagnetic fields are considered emitted power even if the field doesn’t interact with anything or do any work as in the case of a transmission line.