Will Tenaska Abandon Project?
Tamar Hallerman
GHG Monitor
06/01/12
Tenaska Inc., the utility that has attempted to build a 602 MW coal gasification and natural gas hybrid plant in central Illinois for the last four years, is once again reevaluating the future of its Taylorville Energy Center (TEC) after the Illinois General Assembly failed to greenlight the project before its legislative session came to a close May 31. In an e-mailed statement to GHG Monitor today, Tenaska Vice President of Development Bart Ford said the company is currently “exploring options” for action on the project in the months ahead. “[The bill greenlighting the project] is active legislation through January 2013. While it does not seem that the bill will pass the House this spring, Tenaska is currently exploring options for possible action in the fall veto session,” Ford said.
But previous comments from company officials to GHG Monitor indicate that Tenaska could soon walk away from the project. In an interview last month, Tenaska Vice President of Environmental Affairs Greg Kunkel said the utility would consider abandoning the project if it did not gain approval from the Illinois General Assembly by the end of the legislative session. “We’re really at a critical moment to get this approval, and I think it would be very discouraging if we don’t get this final approval at this point,” he said in early May. “I think we’re there. We really have done and pursued this as far as we could reasonably pursue it. We’re always willing to work with stakeholders in the process to try and satisfy the parties that need to be satisfied, but I think it’s time to fish or cut bait.”
Tenaska Attributes Lack of Action to STOP Coalition
TEC’s lack of approval in the state legislature comes several weeks after Tenaska decided to retool the project in order to gain more political support. The company shelved plans for the Integrated Gasification Combined cycle portion of the plant with carbon capture and storage entirely, announcing in early May that it instead planned on pursuing only the natural gas component of the plant. Tenaska subsequently decreased the cost estimates for the project from $3.5 billion to $1.1 billion, saying that the new price tag would greatly reduce the rate impact on area residential and business customers. However, Tenaska still sought a 30-year power purchase agreement from the state, a major sticking point for many of TEC’s opponents. The project had received a $417 million tax credit and a $2.6 billion loan guarantee from the U.S. Department of Energy.
Ford told the Chicago Tribune earlier this week that TEC’s lack of support in the state legislature was due to its “powerful opponents,” particularly the lobbying group launched by its competitor Exelon Corp., the Stop Tenaska’s Overpriced Power (STOP) Coalition. The coalition, comprised of an unorthodox group of several energy companies, environmental groups and trade associations, created a lobbying firestorm surrounding the project in recent years and used economic studies and advertising campaigns to freeze TEC’s political prospects. “At this point we just don’t know whether it is possible to overcome [STOP’s] multimillion dollar opposition campaign in Illinois,” Ford was quoted as saying in the Tribune.
The STOP Coalition eluded that Tenaska’s statements are indicative of the utility giving up on the project. “Tenaska’s decision means Illinois families and businesses will not be forced to pay for this unnecessary and costly plant. This is a good outcome for Illinois electric consumers, competition and the Illinois economy,” the coalition said.
