Power Holdings Company plant

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In 2006, Power Holdings Company announced plans to build a coal-to-liquids plant in Blissville Township, Illinois. The plant convert local coal into synthetic natural gas, or syngas. The plant will use approximately 5 million tons of coal each year.

In March 2007, local residents met to voice their opposition to the project, with concerns over environmental and economic impacts, safety, and quality of life issues.

On January 16, 2009, the Illinois EPA announced a preliminary determination that the project is entitled to a construction permit. The project is now open for public comments. A public hearing was held on March 3, 2009. The official comment period ended on April 2, 2009.[1]

On October 26, 2009, the Illinois EPA issued the final Prevention of Significant Deterioration (PSD) construction permit for the proposed plant. On November 25th, the Sierra Club filed an appeal with the federal Environmental Appeals Board, asking the Illinois EPA to review the plant's permit. The appeal argued that the permit does not require the best available control technology for gas flaring, and that it lacks limits for carbon dioxide and methane emissions, which are pollutants subject to regulation under the Clean Air Act.[2]

In March 2010, the Illinois Senate approved by a 50-0 vote legislation (Senate Bill 2260) that could help Power Holdings of Illinois get financing for the plant. The proposal allows the company to enter into long-term contracts to sell the syngas the plant would produce. Phil Gonet, director of the Illinois Coal Association, said the plant could use 2 million tons of coal a year. The legislation will move to the house.[3]

On January 12, 2011, the Illinois Senate, by a 31-21 vote, passed a measure that pushes state gas utilities to sign 10-year contracts to sell gas the plant would produce, making it easier for Power Holdings of Illinois LLC to get funding for the project. The measure passed after receiving House support, and will move to the governor's desk. At the same lame-duck session, the Senate rejected a bill for the Tenaska Taylorville Energy Center.[4]

For the plant to go through, Gov. Pat Quinn needs to sign off on the project by March 14, 2011. A consumer advocacy group Quinn founded years ago while working as a consumer rights crusader - Citizens Utility Board - is running strong opposition to the bill, asking Quinn to place an amendatory veto on legislation that would kill the bill approved by the Legislature in early January 2011. The groups says the bill would force Ameren and other major Illinois gas utilities to buy synthetic natural gas produced at the Power Holdings of Illinois LLC coal gasification plant in Jefferson County for 10 years, even if they could find cheaper natural gas from other sources. Kolata said that signing contracts with Power Holdings equates to "locking in" home heating costs at a much higher rate for Illinois consumers, while businesses are free to get gas from other sources. Lawmakers who voted in favor of the project say they are prepared to discuss consumer protections that may have been overlooked when the bill was jammed through the Legislature during the final days of the lame-duck session.[5]

On March 14, 2011, Gov. Pat Quinn vetoed two coal gasification plants that would have locked in rates for the facilities, saying he was committed to "clean coal" but that the Power Holdings Company plant and a proposed $3-billion Chicago plant at an abandoned steel site along the Calumet River by Leucadia would result in higher utility bills for Illinoisans.[6]

On June 1, 2011, legislation needed for three multibillion-dollar coal gasification projects to move forward in Illinois - FutureGen 2.0, Power Holdings Company plant and a proposed $3-billion Chicago plant at an abandoned steel site along the Calumet River by Leucadia - arrived at Governor Pat Quinn's desk after winning final approval in the General Assembly the night before. Quinn must decide whether to sign or veto S.B. 2062, S.B. 1533 and S.B. 2169, relating to FutureGen 2.0, Leucadia and Power Holdings, respectively. Quinn has until late August 2011 to sign or veto the measures.[7]

In July 2011, Gov. Pat Quinn signed legislation that paved the way for the plant, requiring the state's four major utilities to buy the synthetic natural gas produced by Power Holdings of Illinois for the next 10 years. The facility is expected to provide 5 percent of the total consumption of residential, commercial and industrial natural gas customers in Illinois. Quinn said the plant would create demand for coal from Illinois, possibly a new underground coal mine that might be operated by Knight Hawk Coal. Power Holdings is expected to break ground for the plant before the end of this year, with commercial operation in 2014.[8] On August 23, 2011, it was reported that the private equity firm behind the plant, Energy Capital Partners, was looking to sell the project, preferably before the end of the year.[9]

In May 2012, developers of the plant confirmed that the project was not proceeding due to difficulty procuring funding. Developers cited "the current unprecedented low price for natural gas." A coal mine was also proposed for the project, and Power Holdings owns an option to develop the property from Washington County, in southwestern Illinois. The company would not comment on the status of that.[10]

On June 12, 2012, the Illinois Environmental Protection Agency turned down the permit request by Power Holdings LLC for the proposed plant, saying the developers failed to provide required information about emissions and an air-quality analysis. The agency said Power Holdings can reapply for the construction permit.[11]

Project Details

Sponsor: Power Holdings Company
Location: Blissville Township, IL
Size: 160,000 mmbtu/day = Up to 65 BCF[12]
Type: Coal-to-liquids
Projected in service: 2013[12]
Status: On hold

Citizen Groups

Resources

References

  1. "Stopping the Coal Rush", Sierra Club, accessed February 2009. (This is a Sierra Club list of new coal plant proposals.)
  2. Mike Riopell,"Stopping the Coal Rush", Sierra Club, accessed December 2009. (This is a Sierra Club list of new coal plant proposals.)
  3. "Coal-to-gas plant gets a big boost in state Senate" The Southern Springfield Bureau, March 19, 2010.
  4. "Ill. Legislature OKs measure involving southern Ill. plant to would turn coal" Fox News, Jan. 11, 2011.
  5. Hannah Hess, "Illinois Gov. Quinn faces deadline as he weighs coal bill" STL Today, Feb. 9, 2011.
  6. Steve Daniels, "Quinn vetoes kill 2 proposed coal-to-gas plants" Chicago Business, March 14, 2011.
  7. Sayeh Tavangar, "Illinois passes bills for 3 gasification projects" Platts Energy Weekly, June 2, 2011.
  8. "Illinois Governor Signs Power Holdings, Knight Hawk Coal bills" Coal Age, August 30, 2011.
  9. Julie Wernau, "Private-equity firm reportedly wants to sell Downstate coal-to-gas project" Chicago Tribune, Aug. 23, 2011.
  10. Julie Wernau, "'Clean' coal plant on hold over low natural gas prices," Chicago Tribune, May 24, 2012
  11. "Illinois EPA rejects coal-to-gas project's permit," WREX, June 12, 2012.
  12. 12.0 12.1 Power Holdings LLC, company website, accessed April 2009

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