Sci/Tech

Dynegy gets pollution waiver for Ill. coal plants

CHICAGO (AP) — The Illinois Pollution Control Board agreed Thursday to give a Texas company extra time to install pollution controls at five Illinois coal-fired power plants, saying that requiring the upgrades sooner would pose an economic hardship.

Houston-based Dynegy Inc., which still must acquire the plants from Ameren Corp., now has until 2020 to install state-mandated soot controls. It also must continue to burn only low-sulfur coal at the three plants that don't yet have "scrubbers" to remove the pollutants, and close down an operating unit at one of the plants as soon as possible.

The panel voted 3-1 to approve the order, and would not comment afterward. Board Chairwoman Deanna Glosser cast the only dissenting vote, saying she did not believe the company demonstrated an economic hardship. Her opinion would be posted on the board's website by Monday, an aide said.

Dynegy spokeswoman Katy Sullivan said the acquisition from St. Louis-based Ameren provided the best future for the plants, their employees and the communities in which they're located, and should be completed next month.

"We believe we can operate these facilities particularly cost effectively because of the similarities to" the four coal-fired plants Dynegy already owns in Illinois, she said. Ameren CEO Thomas Voss said the company now will focus on its rate-regulated electric, natural gas and transmission operations.

Environmental groups opposed the waiver, saying the delay would hurt public health and that Dynegy knew the pollution controls were needed when it agreed to acquire the plants. "Delaying these protections ... comes at a high cost to Illinois families and communities," said Andrew Armstrong, a staff attorney with the Environmental Law & Policy Center.

But local officials in many of the towns where the plants are located supported Dynegy's request. About 600 people are employed at Ameren's five plants — Duck Creek in the Fulton County town of Canton, E.D. Edwards in Peoria County's Bartonville, Coffeen in Montgomery County, Newton in Jasper County, and Joppa in Massac County. The companies have said the combined local economic impact of the five plants is more than $1 billion.

Newton Mayor Mark Bolander rejoiced about Thursday's decision as if it were an early Christmas present, saying the southern Illinois farm community of about 2,850 relies heavily on the taxes generated by the plant.

"This is great, great news," Bolander said. "We're kind of all breathing a collective sigh of relief, and we dodged a bullet." Dynegy had said acquiring the plants from St. Louis-based Ameren — a company so eager to shed the plants it is essentially giving them away — hinged on getting the same kind of waiver that Ameren had received.

Ameren got the original waiver after claiming financial hardship that could force it to close some of its plants. Dynegy argued that the same conditions would exist if it acquired the plants, including lower electricity prices driven in part by competition from natural gas-fired plants. It also said that Illinois' plants — which sell power on the open market and can't pass on costs to customers — were at a disadvantage to plants in other states because Illinois had adopted stricter pollution regulations, while other states chose to wait for stricter federal regulations that haven't taken effect yet.

The Pollution Control Board said the smallest and oldest of the three operating units at the E.D. Edwards plant should be retired as soon as possible. Any closures first must be approved by the region's grid operator, the Carmel, Ind.-based not-for-profit Midwest Independent Transmission System Operator.

That's because coal plants still are essential to keeping the lights on in Illinois and elsewhere. They generate 48 percent of the power sent to the electric grid in a 15-state region that includes Illinois, MISO officials have said.

Despite the waiver, the future of coal-fired power is uncertain in Illinois. Several Illinois plants have closed in recent years because of high environmental costs and falling electricity prices, and environmentalists say it's just a matter of time before they all close.

"Given the recent track record of coal plants in the market, Dynegy is going to have to come to terms at some point that these plants are old, uneconomical and lack modern pollution controls," said Armstrong, the ELPC attorney.

Associated Press writer Jim Suhr in St. Louis contributed to this report.

Follow Tammy Webber on Twitter at https://twitter.com/twebber02

Online:

Illinois Pollution Control Board variance: http://bit.ly/1bGjWut

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