Prairie State Energy Campus

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Prairie State Energy Campus is a 1,600-megawatt coal plant, in Lively Grove, Illinois.[1] The plant is located approximately 45 miles south east of the greater St. Louis area. Coal for the plant would come from the proposed 6.5 million tons-per-year Lively Grove Mine in Illinois.[2]

The Jordan Grove mine in Illinois serves as a secondary site to store combustion coal waste from the Prairie State Energy Campus, as Peabody has a permit for a coal waste site in southeast St. Clair County, Illinois.[3] The large plant will have more than $1 billion in emission controls, and is expected to provide electricity to 2.5 million families in Missouri, Illinois, Indiana, Kentucky, Ohio, Michigan, Virginia and West Virginia.[4]

The plant's owners and investors are eight public power utilities and Peabody Energy. Ownership of the project has shifted over time: Peabody and CMS Energy were co-sponsors of the project, each owning a 15 percent share, but CMS pulled out in May 2007, according to SEC documents filed by the company. A group of Midwestern rural electric cooperatives and municipal power agencies, the Northern Illinois Municipal Power Agency, owns 53% of the project. In July 2007, American Municipal Power Ohio committed to a 300 MW share; in September, 2007, Southern Illinois Power Cooperative committed to a 125 MW share.[5]

Construction on the facility began on Oct. 1, 2007.[6] The first unit went online in June 2012, at which point the power station had a $5 billion price tag. Final completion is scheduled for 2013.[7]

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Background and status

The air permit for the plant was the subject of a long struggle. The Illinois EPA issued a PSD air permit in 2005, which was subsequently appealed. In August 2006, the U.S. EPA Environmental Appeals Board upheld the permit. In October 2006, the Sierra Club, the American Lung Association, and the American Bottom Conservancy challenged the air permit for the plant in a petition to the U.S. 7th Circuit Court of Appeals; that court affirmed the permit in August 2007. In July 2008, the EPA Environmental Appeals Board ruled that the issued air permit is valid.[8]

Peabody Energy initially financed the plant, but later sold 95 percent of the project to eight Midwestern public power agencies.[9]

Prairie Power Inc. (PPI), which is seeking financing for an 8.2 percent share in the plant, was turned away by the Rural Utilities Service when the agency issued a moratorium on new loans for coal-fired power plants in early 2008. In October, a spokesman for the full project said that PPI found financing elsewhere. Lyndon Gabbert, vice president of finance and accounting for Prairie Power, refused to comment on the status of the project's financing, saying only, "The press has a vendetta against this industry."[10]

Debate over the plant continued during its construction, with local communities and environmental groups still voicing opposition. When completed, Prairie State cost over $4 billion. The plant releases CO2 into the atmosphere since its construction permit does not regulate CO2 emissions. It will supply wholesale power to Farmers Mutual Electric members. The cost of the plant will be passed on to ratepayers.[11]

In July 2010, Geneva Mayor Kevin Burns told the Chicago Tribune he recently ordered his staff to study whether the city can limit paying for the project's increasing costs. The communities are locked into 28-year contracts that will require higher electricity rates to cover the construction overruns. One indication of how rates might rise is in 2009 files from the Illinois Municipal Electric Agency (IMEA), an association of 33 cities that owns a 15 percent stake in the plant, including Naperville, St. Charles, and Winnetka. The agency predicted its electric delivery rates to member communities will increase to $63.40 a megawatt hour in 2013, up 30 percent from 2007. Agency officials attribute the rate increase to their investment in the Illinois project and a smaller, less expensive coal plant in Kentucky.[12]

In July 2010, to address mounting construction costs and without providing details of the new agreement, the management company in charge of overseeing the plant, Prairie State Generating Co., said it had brokered a new deal capping the construction budget at "approximately $4 billion," below the projected costs of $4.4 billion. That amount does not include the project's total costs, including nearby coal reserves, mine development and transmission lines.[13]

The first unit went online in June 2012, six months later than planned. Critics say the plant's now $5 billion price tag is 25 percent more than when the city signed on, driving up the price of electricity that Kirkwood and other cities are obligated to buy.[14] The second unit began producing commercial power on November 2, 2012.[15]

Cost and Financing

The plant has an estimated cost of $5 billion, including $1 billion in pollution controls.[16]

The plant is being financed by Bank of America, Citibank, Credit Suisse, JP Morgan Chase, Morgan Stanley, and Wells Fargo.[11]

Site of plant on earthquake fault lines

The plant is being built between the Wabash seismic and New Madrid fault lines, site of the 'Big Shake' of 1811: "when the largest earthquake in U.S. history in nearby New Madrid, Missouri, altered the very waterways that will feed into the Peabody mine-mouth operation," according to author Jeff Biggers. A report published in Nature magazine in 2005, and conferred with a U.S. Geological Survey, found there is a 90 percent chance that a magnitude 6 or 7 earthquake will occur in the New Madrid seismic area within the next fifty years, raising concerns of plant damage and contamination.[17]

Coal waste site

In 2005, while seeking a permit to begin construction, Prairie State told the local zoning board that the thousands of tons of coal ash produced by the station would be shipped out of the county to permitted disposal sites. The zoning variance was granted. Then on June 26, 2012, the Washington County Board met behind closed doors with the lawyer from Prairie State and passed an amendment to an ordinance that granted the company permission to build a 720-acre coal ash landfill on flat farmland near the plant. The amendment allowed the company to bypass the normal zoning process, which would have involved public hearings.

If the coal ash landfill is built, it would ultimately contain a 250-foot high pile of dry coal ash sitting on flat farmland.

The company said the landfill will be lined with a three-foot-thick clay liner and a synthetic liner and surrounded by more than 30 groundwater wells for monitoring potential contamination. Critics say that when coal ash landfill liners have failed in other locations, an expensive system of monitoring wells and pumps must be installed to keep a plume of contaminated groundwater from spreading, and that such failure is usually only a matter of time.

Critics also wonder if the landfill is to increase the company's overall capacity for coal ash storage. The company already has two coal ash disposal sites nearby that have been approved by regulators. One is a spent coal mine site called the Randolph Preparation Plant, which has more than 500 acres of coal ash landfill space available and 22-year life expectancy, according to documentation submitted by Peabody Energy to the Illinois EPA in 2005. The other site, another strip-mined area called the Jordan Grove, has 953 acres available. Prairie State said the new agreement with Washington County prohibits the company from shipping in coal ash from other sites.

Prairie State still needs two separate permits from the Illinois EPA for the Energy Campus landfill — one to landfill the material and one to allow water pollution.[18]

Project Details

Sponsor: Peabody Energy
Location: Lively Grove, Illinois
Coordinates: 38.2782522,-89.6685687 (exact)
Size: 1600 MW (two 800 MW units)
Type: Supercritical
In service: 2013
Status: Operating
Estimated annual CO2 emissions: 13 million metric tons[19]

Financing

Citizen Groups

Resources

References

  1. “Tracking New Coal-Fired Power Plants,” National Energy Tech Lab, May 1, 2007, page 12 .(Pdf)
  2. "New Illinois Mines Could Boost State’s Production" Coal Age, March 24, 2011.
  3. Jeffrey Tomich, "Illinois Coal is on a Comeback" Red Orbit, June 22, 2006.
  4. Rajeshwar Rao, "The Case for Coal" Energy Biz, Sep/Oct 2011.
  5. Peabody Energy 10-K form, Sec Info website, December 31, 2006.
  6. “Construction Starts on $2.9 Billion Southern Illinois Power Plant”, Associated Content, October 2, 2007.
  7. Jeffrey Tomich, "Delays, cost overruns blemish Illinois coal project," STL Today, June 17, 2012.
  8. "Stopping the Coal Rush", Sierra Club, accessed November 2008. (This is a Sierra Club list of new coal plant proposals.)
  9. Renee Schoof, "Giant new plant shows coal power isn't going away," McClatchy Newspapers, March 2, 2012.
  10. "Loss of federal loan fails to derail four other coal-fired power plants," Great Falls Tribune, October 18, 2008.
  11. 11.0 11.1 "Stopping the Coal Rush", Sierra Club. (This is a Sierra Club list of new coal plant proposals.)
  12. Michael Hawthorne, "New Illinois coal plant looks like less of a bargain" Chicago Tribune, July 11, 2010.
  13. Michael Hawthorne, "Prairie State coal-fired plant to cap costs" The Chicago tribune, July 24, 2010.
  14. Jeffrey Tomich, "Delays, cost overruns blemish Illinois coal project," STL Today, June 17, 2012.
  15. "Moving Energy Forward: Prairie State's Unit 2 of Power Plant Goes Live," Prairie State Energy Campus Press Release, November 2, 2012
  16. Renee Schoof, "Giant new plant shows coal power isn't going away," McClatchy Newspapers, March 2, 2012.
  17. Jeff Biggers, "Earthquake Denial? Why Is Peabody Building a Massive Coal-Fired Plant in the New Madrid Seismic Zone?" HuffPo, March 14, 2011.
  18. Dan Ferber, "Prairie State reverses course on Illinois coal ash site," Midwest Energy News, July 25, 2012.
  19. Michael Hawthorne, "Coal plants dominate list of Chicago's biggest polluters," Chicago Tribune, Jan. 22, 2012.

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