Jun 20 - State Journal Register

A $2.5 billion clean-coal power plant proposed near Taylorville is on indefinite hold after a last-minute legislative defeat.

Supporters of the Taylorville Energy Center - a coal- gasification project that has promised hundreds of construction and permanent jobs - on Monday accused Chicago-based Commonwealth Edison of making an all-out effort to kill the project in favor of nuclear power.

A ComEd executive said it was a matter of protecting ratepayers from the undetermined cost of unproven, clean-coal technology.

"We thought it was going too far too fast. There should be some study of the economics before we put it into legislation," said Bob McDonald, senior vice president and chief financial officer for ComEd.

ComEd's parent company, Exelon Corp., is working on plans for additional nuclear plants, including possibly an additional reactor at the Clinton power station 45 miles northeast of Springfield, but McDonald said the plans had nothing do to with the company's opposition to the coal bill.

"We certainly have nothing against clean coal. We are very much in favor of finding ways to address climate change. We have seen a number of states talk about clean-coal plants and most, if not all, have backed away," he said.

McDonald also said there should be stronger state oversight of construction costs for the Taylorville project, giving as an example the federal government's decision to pull out of the FutureGen coal- gasification project near Mattoon early this year because of cost overruns.

The Illinois Manufacturers' Association raised questions as well, warning that requiring utilities to buy power from the plant would raise the cost of electricity to businesses and eventually to consumers.

The Illinois attorney general's office and the Citizens Utility Board consumer advocacy group were among the legislation's supporters.

A spokesman for Ameren Corp., which serves much of central and southern Illinois, said the company was neutral on the bill.

Senate Bill 1987, which fell 10 votes short of Senate approval hours before Saturday night's adjournment of the General Assembly, would have allowed design work to begin on the Taylorville Energy Center.

Once the design was completed, Tenaska, the Nebraska-based company behind the Taylorville project, would have had to return to legislators with cost estimates and a request that the state's two largest utilities, ComEd and Ameren, be required to sign long-term contracts for electricity from the plant.

Ford said Tenaska executives plan to explore other sources - including state incentives for clean-coal technology - to help pay for the estimated $18 million cost of design and engineering work.

But he also said pulling out of Taylorville is among the long- term possibilities.

"We have to consider whether it's still a viable project and if funding is still available," said Ford.

Tenaska plans to contact the office of Gov. Rod Blagojevich about the future of SB 1987.

The chief Illinois House sponsor, Rep. Gary Hannig, D- Litchfield, used a parliamentary maneuver to keep the legislation technically alive, but the latest holdup in the project, which was first proposed seven years ago, left Taylorville Mayor Frank Mathon frustrated.

"I'm extremely disappointed that paid lobbyists for ComEd did such a massive effort of lobbying against this bill," he said. "I think that should concern any taxpayer whenever you have lobbyists doing something like this at the last minute."

Tenaska has estimated the Taylorville Energy Center would create 1,500 construction jobs and provide employment for 600 individuals.

Highlights of SB 1987

* Provides for engineering and design work to begin on the Taylorville Energy Center, a coal-gasification plant. Developers are to report to the Illinois General Assembly in a year to 15 months on estimated construction costs.

* Plant developer Tenaska Inc. committed to "capture" at least 50 percent of carbon-dioxide emissions linked to global warming.

* Requires the state's largest utilities, Commonwealth Edison and Ameren, to negotiate contracts of up to 30 years to buy power from the plant. Current law limits power-purchase contracts to three years.

* Contracts require legislative approval based on the cost study before taking effect. Would require at least 5 percent of power produced in the state to come from clean-coal plants by 2015 with a goal of 25 percent by 2025.

What next?

* Bill fell 10 votes short of 60 needed for Illinois Senate passage on Saturday, but a technical maneuver kept it alive for a later vote.

Originally published by TIM LANDIS BUSINESS EDITOR / tim.landis@sj-r.com.

(c) 2008 State Journal Register. Provided by ProQuest Information and Learning. All rights Reserved.