Tenaska obtains Illinois clean-coal plant permit
REUTERS

June 6, 2007 – NEW YORK – Tenaska Inc. said on Tuesday that Illinois' state environmental agency issued an air permit for the nation's largest clean-coal power plant, moving the $2 billion project a step closer to construction.

At 630-megawatts, the proposed Taylorville Energy Center, an integrated gasification combined cycle (IGCC) plant, would be more than twice as large as existing IGCC demonstration plants in the United States. Construction could begin this year in Christian County in central Illinois, if Tenaska can obtain favorable legislation.

Commercial operation could begin in 2012.

"This plant will be the standard by which others will be judged," said Bill Braudt Jr., general manager of business development for privately-held Tenaska, based in Omaha, Nebraska.

Because the plant will burn Illinois coal and use advanced coal technology to reduce emissions, it has garnered support from a number of groups, including the Illinois governor, mining, environmental and consumer groups.

The state has pledged $500 million in low cost bonds to help finance the plant.
"It does help to have this tremendous support," Braudt said.

The IGCC process turns coal into a gas before so that sulfur and mercury can be removed before the gas is burned to produce electricity.

Taylorville is being designed to allow for the capture of carbon dioxide emissions in the future when the technology becomes available. 

The construction permit is a "big milestone," Braudt said. The next hurdle needed to advance the project is a change in state law to allow Illinois utilities to sign long-term contracts for power.

"You can't pay for a $2 billion plant in three years," Braudt said.

Illinois lawmakers have extended their session to deal with issues surrounding rising power prices as the state attempts to complete a transition to a competitive power market.

In exchange for financial assistance from the state, Tenaska, an independent power producer, will recover its investment in Taylorville through a regulated rate set by the state, rather than a market-based rate.

"We believe the most likely way to get Taylorville built will be to accept a regulated rate of return," Braudt said.

One analysis shows the Taylorville plant could save Illinois consumers $190 million a year by displacing higher-cost, natural gas-fired generation, Braudt said.

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