New coal gasification plant is a bad deal for Illinois

The coal gasification plant that Tenasaka Energy wants to build in Taylorville Illinois is the kind of bargain that does not seem to have the best interests of the customers at heart.

Coal gasification has been around for over 150 years, with a long history of polluting the areas around it. In the 1850s, coal gasification was developed to provide fuel for gas lighting.

The process turns coal into byproducts, some useful, others dangerous. Coal gasification begins by first turning coal into syngas, an intermediary product that can then be turned into other products, including diesel, gasoline or useful chemicals and fertilizers. The ability to create byproducts of oil without oil came in handy for the Germans during World War II and has been used in emergencies since.

An important “selling point” for coal gasification is its ability to sequester carbon dioxide (CO2) emissions. Unfortunately, studies have shown that even with sequestration, coal gasification creates just as much CO2 emission as oil. When the desired product is electricity, the pollution equation does no better, and in the case of the proposed Taylorville plant, there would be no limit to the amount of CO2 that could be released, while other coal plants must meet strict guidelines. Such problems have led to the Sierra Club and other environmental groups successfully suing other states to prevent the introduction of coal gasification.

Tenasaka has most recently suggested building the plant as a natural-gas-burning operation, in order to overcome objections about CO2 sequestration. Illinois would still guarantee sales and profits for the company for the next 30 years. In order to prevent a consumer groundswell of objections to the plan, there is a guarantee that homeowners would see no more than a 2 percent rate increase. While that may sound like a good protection for citizens, local businesses, municipalities and school districts would bear the brunt of the rate increases. This situation has prompted the unusual alliance of the Illinois Chamber of Commerce and the Illinois Sierra Club in opposing the project.

The Illinois Chamber of Commerce opposes the Taylorville plant because its associated rate increases will hurt Illinois businesses. Proponents of the plant have touted the jobs that would be created both during the construction phase (2,400 construction jobs) and during operation of the plant (several hundred), while ignoring the negative effects that increased energy costs will have on businesses.. Higher electrical rates could cost as many as 15,000 to 35,000 jobs throughout the state of Illinois.

Proponents of the plan claim that the additional electricity generated is necessary to meet future demands, while currently Illinois generates more than enough electricity to meet needs. Electricity from the Taylorville plant would cost $212.73 per MWh which compares to wind generated electricity cost of $88 to $121 per MWh, nuclear generated electricity’s cost of $101 to $128 per MWh or traditional coal’s cost of $$141 to $153 per MWh. These comparative costs make it clear why Tenasaka Energy is demanding a 30-year commitment from the state – the electricity from the Taylorville Energy Center would be the most expensive in the state.

A rate impact study by Tenasaka Energy shows that the cost of the state’s subsidy of the plant would be more than $8.7 billion, or $314 million in 2015 alone. The 30 year subsidy  could slow or prevent construction of alternative energy sources. The inclusion of language that caps rate increases for homeowners at 2 percent is deceptive, given that ordinary citizens will end up paying for the increased cost of utilities for local businesses through increased prices on goods and services.

Tenasaka Energy was ranked by Forbes as the 16th largest corporation in America as of 2009, and would be risking absolutely nothing if it is given the 30-year commitment it seeks. Tenaska claims the Taylorville Energy Center would sequester 50 percent of the CO2 generated, but there would be no requirements on the company as to a total amount of CO2 that would be acceptable, and no standard as to what the 50 percent refers to – like a retail chain offering 50 percent off but not telling us what the original price really was. Other options are currently available which would be less expensive and cleaner (wind for instance). More jobs would be lost than gained as a result of this project.

The Taylorville Energy Center looks like a sweetheart deal for Tenasaka Energy, and a lousy deal for the people of Illinois.