Jan 6 - McClatchy-Tribune Regional News - Dave DeWitte The Gazette, Cedar Rapids, Iowa


LS Power has pulled the plug on plans to build a $1.3 billion coal-fired generating station in Waterloo.

The company blamed "slowing load growth in the region due to the current downturn in the U.S. economy, and the fact that LS Power has more advanced projects under development in the region that could serve the same need."

The project was opposed by county boards of health environmental groups concerned mainly about the plant's impact on regional air quality and the effect its carbon dioxide emissions could have on climate change. Those environmental issues probably played a large part in LS Power's plans to cancel the project, according to attorney Wally Taylor of Cedar Rapids, legal chair of the Sierra Club's Iowa Chapter.

"It's great news, and it foreshadows the economic problems that coal-burning plants are going to have," Taylor said.

Taylor said the plant faced a growing possibility of restrictions on its fine particulate emissions, restrictions that the company had hoped to avoid. He said the possibility that the plant could face carbon taxes or placed under a cap-and-trade system of regulating greenhouse gas emissions will also increase under the new federal administration taking office next month.

LS Power's Elk Run Energy Station differed from most other power plants operating in Iowa, in that it would not generate power for use by its owners. Rather, LS Power planned to sell its output to utilities or other major users.

The project cancellation was announced just days after Dynegy Inc. announced it would not continue a coal-fired power plant development joint venture with LS Power.

The Cedar Rapids-based public interest law center Plains Justice issued a statement congratulating LS Power and Dynegy for recognizing that developing new coal plants is "just too financially risky for their stockholders."

Plains Justice said a new Alliant Energy power plant planned for Marshalltown takes the same "imprudent financial risks."

The boards of health in Johnson, Fayette and Black Hawk counties had passed resolutions opposing the plant for air quality reasons.

LS Power Assistant Vice President Mark Milburn expressed gratitude for the "unwavering support" of many individuals and businesses in the Cedar Valley area.

n Contact the writer: (319) 398-8317 or david.dewitte@gazcomm.com

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