TAYLORVILLE, Ill. – Tenaska, managing partner for the Taylorville Energy Center (TEC), announced today that the project has been awarded a $417 million investment tax credit—believed to be the largest ever granted to a single project—under a program jointly administered by the U.S. Department of Energy (DOE) and the U.S. Treasury Department. Cost savings from the tax credit will be passed through to Illinois electric utility customers under the Illinois Clean Coal Portfolio Standard Law (Clean Coal Law).
To qualify for the credit, the DOE was required to evaluate competing projects and certify that TEC is both technically and economically “feasible” and that it can be operated to capture at least 65 percent of its carbon dioxide emissions. Following its evaluation, DOE certified the project and ranked TEC first among bituminous coal projects, enabling the plant to receive this significant federal tax credit.
The TEC, estimated to cost $3.5 billion, will be the cleanest coal-fed commercial scale power plant in the United States, converting Illinois coal into substitute natural gas, and then cleanly and efficiently burning the gas to produce electricity. TEC will create 2,500 construction jobs and hundreds of permanent jobs, according to an extensive engineering study and Facility Cost Report prepared under the Clean Coal Law. The Facility Cost Report calculated the plant’s cost and rate impact based upon a detailed engineering assessment of the labor and materials needed to build the plant.
This 1,800-page report, the work of more than a dozen nationally renowned engineering and consulting firms, concluded that the plant would result in an average projected rate impact of approximately 1.8 percent for the utilities’ residential customers, adding about 6 cents a day to a typical customer’s bill. The report demonstrated that the project would create more jobs than previously estimated, with 10 million labor hours required to build the plant. It also found that TEC would reduce the state’s carbon dioxide emissions by nearly 2 million tons per year.
Under the Clean Coal Law, purchases from TEC are not permitted to cause utility residential rates to increase by more than 2.015 percent. Electricity customers would see no impact on their bills until mid-2015, when the project is slated for completion.
Illinois Power Agency Director Mark Pruitt, who is charged with ensuring Illinois utility customers have a steady supply of affordable electricity, noted that TEC could help address emerging challenges in the energy markets: “As new environmental rules push conventional coal plants out of the market, Taylorville and projects like it must come online to replace that lost baseload power,” said Pruitt. “These baseload plants are needed to balance the supply and price volatility caused by the growing number of variable-output renewable power projects in our state’s energy portfolio.”
“Not only will this substantial federal benefit help us hold the line on electric rates, it validates our design and commercial approach,” said Bart Ford, vice president- Tenaska. Ford added, “Over the next several months, Tenaska will be working through a number of issues to confirm the project’s ability to take advantage of the awarded tax credit.”
Tenaska announced last year that TEC was selected in a competitive process for term sheet negotiations for a $2.579 billion DOE loan guarantee. When finalized, the loan guarantee would put total federal support for the project at nearly $3 billion.
David Kolata, Executive Director of the Citizens Utility Board, commented that, “The Clean Coal Portfolio Standard Law guarantees that consumers will be protected. We support the law and are pleased that Tenaska was able to secure these tax credits which will provide additional benefit for consumers.”
The Illinois Commerce Commission (ICC) is currently reviewing the Facility Cost Report, which was completed in February with funding from the Illinois Department of Commerce and Economic Opportunity. The next step is for the Illinois General Assembly to give its final approval after it receives the ICC’s evaluation of the Facility Cost Report.
“We need jobs and this project provides thousands of them, along with a major boost to our depressed economy,” said State Sen. Deanna Demuzio (D-Carlinville). “We’re grateful that the Federal government is so supportive and recognizes the importance of this plant.”
Ford noted that DOE support for the Taylorville project fits into President Obama’s February 2010 mandate calling upon DOE and other government agencies (collectively known as the Interagency Carbon Capture and Sequestration Task Force) to develop a comprehensive strategy to speed the development of safe, affordable and broadly deployable carbon capture and storage (CCS) technologies, with a goal of putting five to 10 commercial sized clean coal projects in operation by 2016. “We believe that TEC is one of the very few projects nationally that has a real chance to meet President Obama’s target,” added Ford.
“The significant federal support for this project bolsters the State of Illinois’ commitment to curbing greenhouse gas emissions,” said Warren Ribley, director of the Illinois Department of Commerce and Economic Opportunity. “While Taylorville Energy Center means jobs, and is a vital link to sustaining the coal mining industry in Illinois, it is just as significant in keeping our state ahead of the curve in deploying next-generation energy technology.”
John Thompson, director of the Coal Transition Project for the Clean Air Task Force, added, “In order to successfully tackle climate change, projects like Taylorville are essential. By committing to capture 65% of their carbon emissions and with an emissions profile comparable to natural gas, this project represents a vital step towards a commercial scale carbon storage industry and cleaner energy production in the United States.”
Ford concluded, “Tenaska has done all it can to move this project forward, and the federal government has stepped up in a big way. It’s now up to the Illinois General Assembly to say ‘yes’ in the fall veto legislative session to thousands of high end jobs and reliable energy produced from Illinois coal at the Taylorville Energy Center.”
Tenaska has developed approximately 9,000 megawatts (MW) of electric generating capacity across the United States. Tenaska’s affiliates operate and manage eight power plants in six states totaling more than 6,700 MW of generating capacity owned in partnership with other companies. Tenaska Capital Management, an affiliate, provides management services for stand-alone private equity funds, with nearly $5 billion in assets, including nine power plants (with approximately 5,400 MW of capacity), and multiple natural gas midstream assets, including storage gathering and processing facilities.
Tenaska is applying proven pre- and post-combustion technologies on a commercial scale in its two environmentally friendly clean coal projects. Taylorville Energy Center will convert Illinois coal into clean-burning substitute natural gas, use it to generate electricity and capture more than 50 percent of the plant’s CO2 emissions. Trailblazer Energy Center in Nolan County, Texas, is expected to be the first commercial scale, conventional coal-fueled power plant in the world to capture a significant portion of its CO2 after combustion. This plant’s success would demonstrate how existing plants in the U.S. and China could be retrofitted cost-effectively with this carbon-reducing technology. Tenaska was recently cited in benchmarking studies by the Natural Resources Defense Council as having among the very best fleet-wide records in the United States for controlling emissions. For more information about Tenaska, visit www.tenaska.com.
The Taylorville Energy Center’s Integrated Gasification Combined-Cycle (IGCC) with Carbon Capture and Storage process can be seen atwww.cleancoalillinois.com, along with details on the project, the technology and the law.
Dave Lundy, Aileron Communications:
(312) 629-5245, email@example.com
Jana Martin, Tenaska: (402) 691-9595, firstname.lastname@example.org