Prairie State Energy Campus

Project

Proposed and led by Peabody Energy Corporation, the project is jointly owned by public electric utilities with Peabody initially retaining 5% ownership. It is operated by Prairie State Generating Company, LLC. The first 800 MW generator went online in June and the second in November, 2012. The project's Lively Grove underground mine was constructed to produce 6 million tons of high sulfur coal per year. In 2019 it was the 26th largest coal mine in the country, producing 6.4 million short tons of coal.

PSEC stated it will be "among the cleanest major coal-fueled plants in the nation" through use of pollution mitigation technology, producing as low as one-fifth the levels of regulated pollutants as typical U.S. coal-fired plants. Noting that projected emissions nevertheless include 25,000 tons of soot and smog-forming pollutants yearly, the Sierra Club and other organizations unsuccessfully sued to stop the EPA granting an air permit.

As of 2/6/2019, the plant's ownership consists of nine municipal public power agencies including American Municipal Power, Inc. (23.3%), Illinois Municipal Electric Agency (15.2%), Indiana Municipal Power Agency (12.6%), Missouri Joint Municipal Electric Utility Commission (12.3%), Prairie Power Inc.(8.2%), Southern Illinois Power Cooperative (7.9%), Kentucky Municipal Power Agency (7.8%), Northern Illinois Municipal Power Agency (7.6%), Wabash Valley Power Association (5.1%).

Carbon Dioxide Emissions

During construction the Chicago Tribune asserted PSEC would be the "largest source of carbon dioxide built in the United States in a quarter-century." The company projected a 15% reduction in carbon dioxide () pollution compared with other coal-fired power plants based on its use of efficient supercritical steam generators and no emissions from transporting coal.

Judging that regulatory limits on carbon emissions were not likely in the near future, Peabody chose not to employ a more expensive integrated gasification combined cycle design that could more easily be retrofitted with carbon capture technology. The Environmental Protection Agency first proposed limits in March 2012. The limit of 1000 lbs emissions per megawatt-hour electricity would require future coal-powered generating stations to capture approximately half of their output. The limit would not apply to existing and under-construction generating stations, including PSEC.

In 2020 PSEC was among the ten largest industrial sources of in the United States. The Biden administration took office with a platform of transitioning US electrical generation to net zero emissions by 2035. At the 2035 target date the plant will still have decades of expected lifespan remaining.

A 2021 Illinois law requires PSEC plus one other municipally owned coal power station to reduce their carbon emissions by 45% by 2035 and become carbon-free by 2045. Other coal and oil-fired power stations in Illinois over 25 MWe must become carbon-free by 2030, and natural gas plants by 2045.

Costs

PSEC started delivering electricity in 2012 at prices well above market rates. Some of its investors resell the energy at a loss, some raise consumer rates, and two backed out of the project. PSEC's original $2 billion estimated cost attracted municipal electric utilities to invest and to sign 28 year contracts. However, as of early 2010 the estimated cost had increased to $4.4 billion, requiring investors to borrow more money and raising the projected cost of electricity to undesirable levels. Peabody in response capped construction costs at "approximately $4 billion" excluding some costs such as coal development and transmission lines. In January 2013, with many municipalities adversely impacted by the high prices, the SEC subpoenaed information from Peabody. In a bid to exit its share of the Prairie State project, the City of Hermann, MO filed a lawsuit in March, 2015 against the Missouri Joint Municipal Electric Utility Commission and the Missouri Public Energy Pool, claiming that its share of $1.5 billion in debt issued to support Prairie State imposed an unconstitutionally high level of debt on the city.

Peabody divested its 5.06% stake in the project in 2016, accepting $57 million for its original investment of nearly $250 million. The buyer was Wabash Valley Power Association, a Midwest cooperative.

References

References

1. Tomich, Jeffrey. (January 5, 2010). "Prairie State fuels debate: Coal-fired power plant will bring jobs but symbolizes fight over climate change". St. Louis Post-Dispatch.
2. "US: Prairie State coal-fueled power plant advances". EnerPub Energy Publisher.
3. Poe, William. (April 2004). "King Coal Mounts a Comeback". St. Louis Commerce Magazine.
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6. Tomich, Jeffrey. (June 17, 2012). "Delays, cost overruns blemish Illinois coal project". St. Louis Post-Dispatch.
7. (November 2, 2012). "Moving Energy Forward: Prairie State's Unit 2 of Power Plant Goes Live". Prairie State Energy Campus.
8. (24 March 2011). "New Illinois Mines Could Boost State’s Production". Coal Age.
9. "Table 9. Major U.S. Coal Mines, 2019". U.S. Energy Information Administration.
10. "Clean Electricity from Coal". Prairie State Energy Campus.
11. "Prairie State/Peabody". Sierra Club.
12. "American Municipal Power, Inc. Prairie State Energy Campus Project Revenue Bonds Refunding Series 2019A".
13. "PSEC Overview". Prairie State Energy Campus.
14. Romero, Simon. (May 28, 2006). "2 Industry Leaders Bet on Coal But Split on Cleaner Approach". The New York Times.
15. Schoof, Renee }}{{Dead link. (May 2020). "New EPA pollution rules won't apply to Lively Grove". [[Belleville News-Democrat]].
16. Pulver, Dinah Voyles. (January 18, 2021). "Biden’s climate crusade: How his plan to cut carbon emissions, create jobs could impact U.S.". USA Today.
17. Hawthorne, Michael. (January 21, 2021). "Coal-fired power plant in southern Illinois a major obstacle to Biden’s push for carbon-free electricity by 2035". Chicago Tribune.
18. (September 9, 2021). "In Midwest first, Illinois bans fossil fuel electricity sources". Reuters.
19. (September 10, 2021). "House Passes Energy Bill With Labor, Environmental Groups On Board". WGLT.
20. Hawthorne, Michael. (July 24, 2010). "Prairie State coal-fired plant to cap costs". Chicago Tribune.
21. (July 22, 2010). "Prairie State and Bechtel Announce New, Fixed-Cost EPC Agreement Providing Greater Economic Stability". Prairie State Generating Company, LLC.
22. Tomich, Jeffrey. (March 11, 2013). "For tiny town, gamble on coal plant becomes a fiscal crisis". St. Louis Post-Dispatch.
23. Barker, Jacob. (March 30, 2015). "Hermann, Mo., sues power commissions over Prairie State coal plant". St. Louis Post-Dispatch.
24. Tate, Curtis. (January 22, 2016). "Peabody sells stake in Illinois power plant for fraction of investment". McClatchy DC Bureau.
25. (May 19, 2016). "Peabody Energy Completes Sale Of Interest In Prairie State Energy Campus". Peabody Energy.