Credit: geodesic / Flickr.com -- Creative Commons License Funding squabble could kill coal-to-gas plant in IllinoisBy Andrew Thomason | Illinois Statehouse News SPRINGFIELD — It could be lights out for a proposed $3 billion coal-to-gas plant on the south side of Chicago.
The Illinois Commerce Commission, which regulates utility companies in the state, voted 3-2 Tuesday in favor of only asking utility companies Ameren Corp. and Nicor Inc. to buy 84 percent of the plant’s output and pay for 84 percent of the plant’s maintenance. This bucks Chicago Clean Energy LLC, the company backing the plant, which wanted the utility companies to cover the entire cost to build and maintain the plant as well as buy all of its output.
Chicago Clean Energy LLC, a subsidiary of the holding company Leucadia National Corp., has said that if the utility companies do not pay for the plant’s maintenance and buy the output, it would back away from the project, because it would be financially unfeasible.
Eileen Boynce, a spokeswoman for Chicago Clean Energy LLC, said the company is expected to bring up the matter before the ICC again in the near future.
"We are evaluating the next step," Boynce said.
State Sen. Donnie Trotter, D-Chicago, who supports the project, said the 1,000 temporary jobs and 200 permanent jobs that would stem from the plant are needed in this economically devastated area of the state.
The unemployment rate for Chicago was 9.6 percent for November, the most recent data available from the U.S. Bureau of Labor Statistics. Nationally, the unemployment rate for December was 8.5 percent.
“It is not the role of the commission to decide the terms of this project. It is definitely not the role of this commission to terminate this project by inserting uncalled for fatal provisions,” Trotter said.
Trotter has received $7,500 from Chicago Clean Energy LLC since 2010, according to the Illinois State Board of Elections.
Legislation passed by the General Assembly and signed by Gov. Pat Quinn last year created the legal pathway for the plant, which would convert coal into synthetic natural gas.
Tuesday's vote stems from Chicago-area gas utilities Peoples Gas and North Shore Gas making the surprise announcement late last year that they would not to do any business with the plant, resulting in the project not being fully funded.
But the legislation said no single utility will pay for more than 42 percent of the plant’s maintenance, or buy more than 42 percent of the plant’s output.
“If the Legislature, which allowed for companies to opt out from participating in the purchase of Chicago Clean Energy’s output, also meant for the ratepayers of the remaining companies to pay a disproportionate share of the cost to make up the difference, the Legislature could have said that in the legislation, and they didn’t,” Doug Scott, chairman of the ICC, said.
Quinn vetoed an earlier version of the plan, saying customers would end up paying an extra $191 every year during the next 30 years on their gas bill. The revised measure limits gas rate hikes to 2 percent annually and guarantees customers will save $100 million on their gas bills over the next three decades.
The plant would burn Illinois coal and is touted as being 100 times cleaner than conventional coal power plants. The carbon dioxide from the conversation of coal to synthetic natural gas would be stored underground.
No matter what, construction of the plant is years out, Boyce said. She said the proposed plant site must first be cleared of buildings and Chicago Clean Energy LLC must secure permits from the U.S. Environmental Protection Agency.
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