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Tenaska ties $30M for minority students to Springfield votes for power plant

By: Steve Daniels and Greg Hinz October 26, 2011

(Crain's) — Tenaska Inc., the Omaha, Neb.-based company trying to win enough votes in the Legislature for its planned “clean coal” power plant in Downstate Taylorville, has agreed to set up a $30-million foundation providing scholarships to disadvantaged minority students if the bill passes.

The pledge is contained in a memorandum of understanding the company reached about three weeks ago with the Illinois Black Chamber of Commerce, as Tenaska scrambles for support in the fall veto session that began Tuesday.

Senate President John Cullerton recently took up sponsorship of Tenaska’s bill, which would require utility ratepayers and customers of alternative power suppliers to pay higher electricity rates over 30 years to cover the cost of the $3.5-billion plant.

The Senate Executive Committee voted 8-5 Tuesday to send the bill to the chamber floor. A floor vote is expected Wednesday.

Tenaska’s bill passed the House a year ago, but fell short in the Senate in January under fierce opposition by Commonwealth Edison Co. and its parent, Exelon Corp., as well as non-utility power suppliers.

In an interview, Tenaska Vice-president Bart Ford said the minority scholarship funding arose from discussions over the past year with African-American and Latino lawmakers, who asked how the project would benefit their constituents economically, given that it’s located in a part of the state that’s overwhelmingly white.

“A way to ensure economic justice . . . would be to provide for some additional benefits” to minority communities, Mr. Ford said.

The establishment of the foundation, which would provide $1 million in college and vocational-school scholarships to minorities annually for the 30 years Illinois consumers would have to buy the output from Tenaska’s plant, will be overseen by politically connected minority Chicago law firm Neal & Leroy LLC, Mr. Ford said. At least 75% of the scholarship money would go to disadvantaged African-Americans under the agreement.

Members of the foundation’s board will include prominent African-Americans and other minorities, none of whom have yet been identified, Mr. Ford said.

Asked whether they would include state lawmakers, he said, “That’s not what we had in mind.”

The memorandum also includes a commitment to set aside 15% of the prime construction contracts to minority- or women-owned firms, equaling about $200 million in work, Mr. Ford said. And Tenaska promises up to $2.5 million for minority worker training programs.

Asked whether the deal opens Tenaska to accusations of buying votes, Mr. Ford said the company simply is responding to concerns voiced by lawmakers and others about the project’s impact on the state and its economy.

“To be honest, I’m very surprised by that,” he said.

Of course, Tenaska isn’t the only energy company throwing money around in Springfield in order to boost support.

ComEd has showered tens of thousands in campaign contributions on state lawmakers since May, when it became clear it would need more votes for a veto override Gov. Pat Quinn’s veto of its controversial bill to automatically hike rates annually under a formula in order to finance billions in power-grid modernization over the next decade. The utility now appears close to securing enough support to override.

Capitol Fax reported Monday that ComEd parent Exelon this year has used a loophole in state campaign finance laws to shift $189,000 from its federal political action committee to ComEd’s state PAC in order to boost state contributions.

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