Illinois Coal to Gas Plants Going in Opposite Directions

By July 14, 2012 News

Developers of two different coal to gas plants proposed in Illinois have seen their fates take divergent courses in the last month.  Tennaska, who had been pushing for over a year to build a new power plant that would be fueled by gasified coal, saw their legislative initiative to force Illinois electricity suppliers to purchase the output of the plant under 30 year agreements at above market prices fail to be considered by the legislature.  With the legislative session now over, it’s unclear when or if the bill will be taken up again.

Conversely, Leucadia National, who has been planning a plant that would turn coal into natural gas for consumption by end use consumers, was able to get a bill sent to Governor Pat Quinn to require 95% of the output of the plant purchased under 30 year agreements with two of the state’s large natural gas utilities, Ameren and Nicor.  The plant had previously been authorized by the governor last year, but two of the state’s natural gas utilities, People’s Gas and North Shore Gas refused to sign the long term contracts, and Ameren and Nicor did not want to purchase the additional gas.  The bill that went to the governor will require them to do so.  People’s and North Shore rejected the plant because the price of the gas under the 30 year agreements is 3 to 4 times the current market price of natural gas.