Illinois Senate Rejects Clean-Coal Plant Support

The Illinois Senate rejected rate subsidies that Tenaska Inc. is seeking for a $3.5 billion coal- fed power plant in the town of Taylorville, a spokesman said.

Senators rejected the state support yesterday evening, said John Patterson, a spokesman for Senate President John Cullerton, a Chicago Democrat. After the 29-25 vote, the bill’s sponsor, Democrat Deanna Demuzio of Carlinville, used a procedural maneuver to allow possible reconsideration of the bill, Patterson said.

To keep the measure alive in its current form, Demuzio must call for a vote before the legislative session ends Jan. 11.

Exelon Corp., the largest U.S. nuclear power generator, opposed the Taylorville proposal along with some of the more than 40 companies that started competing for Illinois customers after the state deregulated its retail electricity market in 1997.

Barton Ford, vice president for development at Omaha, Nebraska-based Tenaska, has said the company will walk away if the Senate turned down the project or failed to act during the current session. He declined to comment today.

The measure the Senate is considering would require any company selling retail electricity in Illinois to buy some power from the plant for 30 years.

The bill would boost Illinois’s total annual electric bill by $286 million, or 2 percent, and damp job creation, according to Philip O’Connor, spokesman for a business coalition called Stop Tenaska’s Overpriced Power. The group includes the Illinois Chamber of Commerce and the Illinois Manufacturers’ Association.

‘Burden on Public’

“I just don’t think legislators were prepared to place this kind of burden on the public,” O’Connor said after the vote.

Exelon supports efforts to take advantage of Illinois’s energy resources, Judy Rader, a spokeswoman, said in an interview before the vote.

“Exelon believes it is in the public interest to see a clean-coal technology demonstration project,” Rader said. “But a clean-coal demonstration project should be supported nationally by federal subsidies, not only by Illinois electricity customers.”

Exelon stands to profit from the shift away from coal. The EPA’s crackdown on nitrous oxide, mercury and other pollutants will reduce coal-generating capacity in some states where Exelon sells electricity, Chris Crane, Exelon’s president, told investors at a November presentation.

Obama Support

President Barack Obama is advocating demonstration projects such as Tenaska’s to encourage energy alternatives after climate-change legislation died in Congress last year. The U.S. Department of Energy is considering $3 billion in tax credits and loan guarantees for the plant in Taylorville, about 200 miles (320 kilometers) south of Chicago. It would generate 716 megawatts, enough to power about 600,000 homes.

The Taylorville plant is designed to emit only as much carbon dioxide as a natural gas plant, even though coal contains twice as much of the pollutant as natural gas. The plant would capture its carbon dioxide emissions and bury them underground or ship them to aging oil wells where they would be used to boost output.

To contact the reporter on this story: John Lippert at jlippert@bloomberg.net

To contact the editor responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net

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