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Illinois Businesses Seek to Dim Plans for $3.6-B Coal Gasification Plant

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Illinois businesses are petitioning state lawmakers to strike down legislation that would impose $12 billion in consumer subsidies to support a planned coal gasification plant they say isn't needed and would cost electricity customers far more than originally promised.

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Supporters of the project, which would be sited in Taylorville, about 20 miles southeast of Springfield, contend the plant could serve as a model for future clean-coal initiatives while creating 2,400 construction jobs and 155 permanent jobs. They also believe the $3.6-billion plant, to be developed by Omaha, Neb.-based Tenaska, would jump start the state's struggling coal industry.

However, eight commercial interests, including Cargill Inc., PetSmart, Safeway and Wal-Mart Stores, complain legislation would require Illinois utilities to enter into 30-year contracts to purchase power from the facility at above-market rates.

A study funded on behalf of a coalition known as Stop Tenaska's Overpriced Power (STOP) concludes the contracts would cost customers $400 million per year,  as compared to the $286 million they currently pay. The report, issued by Concord, Mass.-based Northridge Group, also suggests projected costs to Illinois customers have increased 40% since Tenaska issued an initial cost report in 2010.

“We cannot afford this costly legislation,” the eight businesses indicated in a letter to Illinois lawmakers. “Through its direct impact of significant rate increases, its indirect impact of substantially weakening both Illinois' thriving retail electricity market and the market's cost-savings benefits, the Tenaska bill will actually destroy more jobs than it will create and will harm, not help, Illinois businesses and [the state's] economy.”

The eight firms, which also include Boston Market Corp., The Andersons Inc., Leggett & Platt Inc. and Macy's, collectively spend more than $110 million each year on electricity in the state.

Tenaska officials contend that opponents of the plan have engaged in “fuzzy math” that fails to account for 30 years worth of inflation or a $417-million investment tax credit that will reduce the project's impact on customers.

The lllinois Senate approved the plant subsidy bill last year. The bill currently is being considered by the Illinois House.

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