Taylorville Energy Center

Taylorville Energy Center was a coal plant proposed by Christian County Generation, to be built in Taylorville, Illinois, to be operated by Tenaska, In June 2013, Tenaska announced that the project, along with Tenaska's proposed Trailblazer Energy Center in Texas, was being cancelled. The company cited cheaper natural gas, falling prices for alternative energy, and uncertainty over state and federal energy regulation.

Background
On June 6, 2007, the Illinois EPA issued the Air Construction Permit; on June 9, the Illinois Sierra Club appealed the permit to the U.S. EPA Environmental Appeals Board, arguing that the state did not require pollution controls on the plant’s global warming emissions. As of November 2007, Tenaska had grown impatient with the state officials’ hesitance to approve the necessary energy contract for the plant, and began threatening to move the plant elsewhere.

On January 29, 2008 the Board rejected the Sierra Club's appeal of the air permit.

In July 2008, the Illinois House passed SB 1987, which if passed by the state Senate would require Tenaska to conduct a detailed cost study projected to cost between $10 and $18 million. The Senate will consider the bill in fall 2008, and if passed, it is estimated that construction of Taylorville will be delayed until 2014-2016.

On January 12, 2009, SB 1987, also known as the Clean Coal Portfolio Standard Act, was signed into law. The new law creates a framework for the development of coal gasification projects with carbon capture and storage, including Taylorville Energy Center. To qualify as a clean coal facility under the new legislation, a plant must capture at least 50 percent of its total CO2 emissions, as well as limit regulated pollutants, such as sulfur dioxide, nitrogen oxides, carbon monoxide, particulates and mercury, to levels that are no higher than those of natural gas-fired plants.

SB 1987 guarantees one initial clean coal facility with a final air permit to 30-year purchase agreements for the sale of its electrical output. Following the enactment of the legislation, Tenaska announced that Taylorville Energy Center, which has its final air permit from the Illinois EPA, will be that "initial clean coal facility." Current estimates of construction costs are approximately $2.5 billion, and expected completion is 2014.

On March 26, 2009 Tenaska and Christian County Generation LLC began completing their Front End Engineering and Design (FEED) study and facility cost report. According to Illinois Clean Coal Portfolio Standards Act (ICCPSA), the Illinois Commerce Commission and the Illinois General Assembly must review this report. If approved, construction is expected to begin in 2010. Current cost estimates for the Taylorville plant are $3.5 billion.

On July 10, 2009, project developers announced that the DOE had chosen the plant to move forward with final funding negotiations. If final term-sheet negotiations are successful, the plant will receive a federal loan guarantee of almost $2.6 billion. The negotiations will last approximately 6 to 9 months.

On March 3, 2010 Tenaska announced that its Taylorville station would cost $3.5 billion and would go on-line in 2014. The plant would burn coal to produce gas. The company stated that the plant would be a "net reducer" of CO2. The plant plans to use Carbon Capture and Storage to displace up to 50 percent of its CO2 emissions. Tenaska also said it still needs Illinois environmental regulators to issue an air permit as well as the U.S. Department of Energy, which agreed to give the project a $2.6 billion loan guarantee, to complete an environmental review of the proposed project. The facility will be located on a 713-acre site near the town of Taylorville, which is located approximately 35 miles southeast of the capital of Springfield.

In July 2010, the plant got an award of a $417 million government tax credit, which the company said was the largest such grant for a single project and a significant step toward final approval. The money comes from federal stimulus funds approved in 2009. The award is from the Department of Energy and the Treasury Department. Adding the $2.58 billion loan guarantee from the Energy Department, total federal support for the project is now $3 billion. To qualify for the newest award, the Energy Department had to certify that the Taylorville project could capture at least 65 percent of its carbon dioxide emissions, more than the company had planned. Now the Illinois General Assembly needs to give final approval of the project, and the Illinois Commerce Commission has to review a report on the project's costs. Other environmental requirements also must be met. Developers hope that construction could begin in the middle of 2011. Under legislation providing state funds for the project, electricity customers will not see an increase on their bills related to the project until 2015, when the Taylorville Energy Center is scheduled for completion.

In October 2010, the Springfield State Journal reported that Tenaska has said it won’t build the plant unless a state law is enacted that forces Illinois consumers to buy the plant’s power through 30-year contracts "at above market prices." The article continues: "To avoid a groundswell of opposition to the plant, the proposal calls for a 2 percent cap on residential rate increases per year. That means most of the burden would fall on businesses, governmental bodies and public service organizations. For example, this increase would cost the Chicago public schools a minimum of $1 million per year; the Water Reclamation District, $1.2 million per year; and the Metra/CTA about $1 million. These organizations and the thousands of businesses who employ millions of Illinoisans will get nothing in return for this added cost." Also highlighted are questions over how the CO2 will be sequestered, since the proposed Denbury pipeline to transport the CO2 from TEC to the Gulf of Mexico "is in grave trouble." Finally, the article notes that while Tenaska says the project will create jobs, the increase in electricity rates will cost anywhere from 15,000 to 35,000 jobs annually.

Tenaska announced in October 2010 that it had begun its search for a supplier of coal for its Taylorville Energy Center (TEC). While the majority of Illinois plants currently import coal from other states due to the Illinois' coal's high sulfur content makes it environmentally and economically difficult to use cleanly with conventional technology. However, the gasification process at TEC reportedly will be able to reduce by more than 90 percent the sulfur, mercury and particulate matter from the fuel prior to combustion. The facility also plans to achieve lower nitrogen oxide emissions than any existing coal boiler.

On November 29, 2010, the Illinois House Electric General and Commerce Committee voted 7-4 vote to approve the plant.

On November 30, 2010, legislation (SB 2485) for the plan got only 58 of the needed 60 votes, and failed. State Rep. Frank Mautino, D-Spring Valley, who sponsored the measure, said he would talk with opponents to see if he can insert new language in the bill to help propel it to the Senate during the final hours of the fall veto session. Hours later, the plant was resurrected with a 63-50 vote. It will now return to the Senate for another vote on the amended bill.

On January 5, 2011, the Illinois Senate rejected rate subsidies that Tenaska Inc. was seeking for the plant, which would require any company selling retail electricity in Illinois to buy some power from the plant for 30 years. Exelon, 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. 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. 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. To keep the measure alive in its current form, Demuzio must call for a vote before the legislative session ends Jan. 11, 2011. Barton Ford, vice president for development at 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 on the vote.

On January 12, 2011, senators voted 18-33 again rejecting legislation that would ensure plant construction. The Tenaska bill would have required the state to purchase the plant's entire output at above market rates. The bill had seven fewer supporters than the proposal rejected the week before. Opponents say the Tenaska legislation would boost rates for large electrical users, potentially costing jobs. The bill would have capped increases at 2% over current levels for residential customers, but provided no such price protection to larger customers, like Archer Daniels Midland. With a new General Assembly being sworn in that day, it could be another two years before the measure makes its way through the legislative process again. Officials with Tenaska have said they would drop plans if the measure didn’t win approval by this date.

On May 30, 2011, legislation allowing construction of the plant in Taylorville got out of a House committee, despite reports of strong objections from opponents ranging from utility companies to farm groups. Supporters said they’ve made changes: residential customers who buy power from non-traditional utilities will have rate caps, and Tenaska is pledging to cover more of the cost overruns to minimize the effect on industrial rates. Opponents included Exelon, the state Chamber of Commerce, the Illinois Manufacturers’ Association, Illinois Farm Bureau, Illinois Retail Merchants Association and others, who said the plant will raise electricity rates. Senate Bill 1653 goes to the full House for a vote. The bill also contains language that will pave the way for the FutureGen coal project, dealing with state liability for the carbon sequestration facility to be located in Morgan County.

In May 2012, Tenaska said they would cut the plant's costs by 60% and have it run on natural gas rather than coal, although it is believed the plant would be built so that it could later be retrofitted to begin transforming Illinois coal into synthetic natural gas. Tenaska's project passed the Senate but was struggling to gain the votes it needed to win the approval of the House. With the session ending by June 2012, time to strike a deal was running out. Still, in order to finance construction, Tenaska told lawmakers they still want the General Assembly to approve a plan that would require customers to purchase electricity from the plant for the next three decades. Business groups opposed to the rate structure say they intend to continue fighting the plan.

Project Details
Sponsor: Christian County Generation, LLC Location: Taylorville, Illinois Size: 630 MW Type: IGCC/Coprod (excess synthesis natural gas to be sold on the market) Projected in service: 2014 Status: Cancelled 2013

Citizen Groups

 * Illinois Sierra Club, Jack Darin, jack.darin [at] sierraclub.org, or Becki Clayborn, becki.clayborn [at] sierraclub.org

Related SourceWatch Articles

 * Carbon Capture and Storage
 * Carbon Capture and Storage demonstration projects worldwide
 * Carbon Capture and Storage in the United States
 * Existing U.S. Coal Plants
 * US proposed coal plants (both active and cancelled)
 * Coal plants cancelled in 2007
 * Coal plants cancelled in 2008
 * Illinois and coal
 * State-by-state guide to information on coal in the United States (or click on the map)