Business and Finance

A next-generation coal-fueled power plant in central Illinois got a boost Monday when impeached Illinois Gov. Rod Blagojevich signed a bill that will enable work on the project to advance.

Developers of the project near Taylorville, Ill., have been in a holding pattern for more than a year, unable to move forward without long-term commitments to sell the plant’s output. Illinois utilities can’t enter such contracts under a 1997 law that deregulated the state’s electric market.

Legislation signed Monday requires electric utilities including Ameren to enter into 30-year contracts to buy electricity as long as the impact on rates isn’t too great.

"We now have the momentum that we and the state need to get this vital project built and operational," said Bart Ford, vice president of Omaha, Neb.-based Tenaska, the managing partner of the group building the project.

The 500-megawatt plant would be big enough to power about 500,000 homes. It is expected to be completed by 2014 and estimated to cost $3.5 billion.

The project promises to create mining and construction jobs as well as help limit emissions of carbon dioxide, the greenhouse gas most closely linked with global warming. It is been backed by a broad coalition of interests, including environmental groups, organized labor and Illinois Coal Association.

Instead of burning coal, the plant would convert coal to methane, which will be use to generate electricity. Developers say the plant will initially capture 55 to 60 percent of carbon dioxide emissions, which would be injected into underground rock formations or piped to the Gulf Coast for oil recovery.

John Thompson, director of the Coal Transition Project for the Boston-based Clean Air Task force, said the Illinois law requires emissions from coal-fueled plants to be as low as those from plants that run on natural gas payday loans online.

"This very tough standard should become the national model," said Thompson, who works in Carbondale, Ill.

The state will provide up to $18 million for planning and updated cost studies required before construction begins. The Legislature could still block the project if cost estimates rise too much.

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"We have the burden of going back to the General Assembly and showing them that the cost is reasonable," Ford said.

The plant will be subject to regulation by the Federal Energy Regulatory Commission as well as the Illinois Commerce Commission.

The bill caps the amount of any potential rate increase at 2 percent a year, and no increase can be passed through to customers until the plant begins operation. If the impact on rates is greater, utilities can reduce the amount of electricity they buy from Taylorville.

jtomich@post-dispatch.com | 314-340-8320

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