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Climatewire Coalition of business groups attacks Ill. 'clean coal' plant

By Daniel Cusick, E&E reporter 

Published: Thursday, March 29, 2012

A coalition of Illinois businesses, including retailers Wal-Mart, Safeway and Macy's, has asked the Illinois General Assembly to reject legislation that would permit the construction of a $3.5 billion clean coal plant in the central part of the state.

The 716-megawatt Taylorville Energy Center, whose prospects are bound to S.B. 678, also called the "Tenaska bill," would employ coal-to-gas conversion technology that proponents say will make the plant one of the cleanest coal-burning facilities in the world.

The plant would also use carbon capture and storage (CCS) technology to help offset as much as 1.9 million tons of annual energy sector carbon dioxide, according to a "Clean Coal Illinois" website set up by Nebraska-based Tenaska Energy, which would build and operate the plant.

But critics of the legislation, which awaits action in the House of Representatives, say its passage will drive up electricity costs by as much as $12 billion by forcing Illinois rate-based utilities and other electricity providers to purchase higher-cost electricity from the Taylorville plant, which would be built about 25 miles southeast of Springfield.

In addition to the retailers, others opposing the bill are a coalition led by Chicago-based Exelon Corp., and its subsidiary ComEd, which provides electricity to several million people in northeastern Illinois.

Exelon, one of the nation's largest nuclear power producers, has argued that the Taylorville coal plant would wed Illinois ratepayers to coal-fired electricity for 30 years at above-market rates while also driving other alternative electricity providers -- such as wind energy producers -- away from the state.

In a letter sent yesterday to Illinois House Speaker Michael Madigan (D), eight business executives representing 70,000 Illinois workers echoed such criticisms and asked the speaker to keep the bill from moving forward.

"We cannot afford this costly legislation," states the letter, also signed by executives of Cargill Inc., PetSmart Inc., Boston Market Corp., the Andersons Inc., and Leggett & Platt Inc. Collectively, the companies operate 447 facilities throughout Illinois, according to the letter.

"If approved, the bill not only will substantially increase our electricity costs for thirty years directly through increased rates, but will also inflict considerable harm on Illinois' thriving competitive retail electricity market and the regional competitive wholesale market," the letter continues.

Company claims high cost estimates are 'mostly fictions'

Tenaska Energy officials maintain the plant will boost the state's economy by creating a new market for Illinois coal while also adding significant amounts of clean electricity to the regional transmission grid.

And they tout other provisions in the bill, such as measures allowing renewable energy purchases by the Illinois Power Authority, the promotion of energy efficiency and an expansion of distributed electric generation.

Moreover, Dave Lundy, a Tenaska spokesman, said opponents of the Taylorsville plant are dramatically overstating the projected additional costs to Illinois ratepayers, which Tenaska maintains are more likely in the range of $7.5 billion over 30 years.

Tenaska's lower cost estimates are based in part on expected state and federal tax credits that should shave several hundred million dollars off the plant's price tag.

While acknowledging the new plant would sell power at above-market rates, Lundy called opponents' cost claims "mostly fictions" that rely on shaky assumptions about the future of other fuels like natural gas, which is currently selling at near historic lows due to much higher yields from wells undergoing hydraulic fracturing.

And under the legislation, electricity rates could not rise by more than 2 percent annually for residential ratepayers. Business customers, however, would have less protection against price spikes, according to a recent study commissioned by Exelon examining the impacts of the legislation.

Lundy also said critics are overlooking the Taylorville plant's cutting-edge technology that will produce electricity from coal with very low emissions of both conventional pollutants and greenhouse gases, including carbon dioxide, the most abundant greenhouse gas.

The plant will be built using a form of integrated gasification combined-cycle (IGCC) technology that converts coal to gas and allows for the pre-combustion removal of a number of toxic air pollutants, including sulfur dioxide, particulate matter and mercury.

Also, more than half the plant's CO2 emissions will be captured and sequestered underground using state-of-the-art technologies.

"If this bill passes, we will have gone a long way toward making Illinois one of the leaders in the clean energy movement, and that's a big deal," Lundy said.

Uncertain prospects

But even if Tenaska can prove its proposal to be economically and environmentally sound, prospects for the bill's passage remain uncertain. 

The Senate passed a version of the bill on a 30-28 vote last year (Greenwire, Nov. 30, 2011), but differences within the 117-member House of Representatives could stall its progress.

While lawmakers may be drawn to the idea of "clean coal," applications of IGCC technology have been limited to just a few sites, and those projects have been beset by technological hurdles and cost overruns. Carbon capture and storage technology, meanwhile, has been largely unproved on coal-fired power plants, much less a plant the size of the proposed Taylorville Energy Center.

As such, environmental groups -- which have waged a largely successful campaign to close older coal-fired plants, including in Illinois -- have remained wary of proposals that would help coal regain some of its lost stature as a fuel of choice for electricity production.

The Illinois chapter of the Sierra Club has campaigned against the Taylorville plant and its enabling legislation, charging its construction would result in a net increase in CO2 emissions, exacerbate environmental damage caused by coal mining in the state, and displace other clean energy technologies like wind power, which has made significant gains in Illinois.

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