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Mark Denzler: State needs jobs, but not at any cost

Posted Sep 15, 2011 @ 12:05 AM
Last update Sep 15, 2011 @ 09:39 AM

Imagine the reaction of The State Journal-Register editorial board if legislation was introduced in the General Assembly requiring every household and business in Sangamon County to purchase the Chicago Tribune on a daily basis for the next 30 years at a cost of $2.50 per paper. My guess is that the next editorial would eviscerate the proposal for creating unfair competition and saddling consumers with exorbitant prices. Unfortunately, that type of sweetheart deal is exactly what the editorial board endorsed in its recent support of the Tenaska proposal to build the Taylorville Energy Center.

For the past three years, Tenaska, which is one of the largest privately held companies in the U.S., has employed an army of lobbyists and public relations firms in its quest to pass legislation hiking electricity rates in Illinois by $286 million annually for the next 30 years in order to fund its proposed experimental energy plant in Taylorville.

According to Tenaska’ own study, financed by an $18 million taxpayer-funded grant, the cost of its electricity will be 400 percent to 500 percent higher than the price of electricity in today’s market. The independent Illinois Commerce Commission noted, “after careful review, the Commission concludes that the Tenaska Energy Center project features high costs to ratepayers with uncertain future benefits, and uncertainties that potentially add to already-significant costs.”

It’s absolutely critical to create jobs in Illinois, but not at any cost. According to Tenaska, this project will create 2,000 construction jobs for four years with an additional 400 jobs in the coal mines, transport and at the energy center. When you factor in the $8.6 billion subsidy paid by consumers and businesses, this equates to a ratepayer subsidy of $500,000 per job every year for the next 30 years!  

An economist who has studied Illinois energy markets for many years, Dr. Mathew Morey, used a standard economic formula to make an assessment of the Tenaska facility. According to Morey’s economic analysis, which is on file with the ICC, adding $8.6 billion in above-market electricity prices will harm the economy leading to the loss of 15,000 to 35,000 jobs over the next several decades. This economic study and its analysis have not been refuted.

The myth that Illinois will not have enough energy capacity in the future has been thoroughly debunked. Illinois is part of two national power pools, meaning that the closure of one or two coal-fired plants in the state will not have any noticeable impact. Secondly, the Federal Energy Information Administration released its 2011 outlook, which doubles the estimated recoverable natural gas reserves and forecasts electricity prices actually falling by nearly a penny per kilowatt hour by 2016.

The SJ-R inaccurately describes the STOP (Stop Tenaska’s Overpriced Power) Coalition and the role of electric utilities in opposing Tenaska. Coalition members opposing this legislation include the Illinois Manufacturers’ Association, Illinois Retail Merchants Association, Illinois Farm Bureau, State Chamber of Commerce and Sierra Club, along with dozens of manufacturers, retailers, hospitals, universities and others that cannot afford to pay higher energy costs.

The Illinois Manufacturers’ Association agrees with ex-state Rep. Gary Hannig, the original sponsor of legislation authorizing the Tenaska study, who said, “Let me be the first to say that if the (Tenaska) proposal comes back with a number that is significantly higher than the going rate, then I would be the first to say we should not do this plant.” Lawmakers have rejected this legislative scheme twice and we encourage them to do so again.

Mark Denzler is vice president and chief operating officer of the Illinois Manufacturers’ Association. He is a community member of  The State Journal-Register editorial board.

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