Lights Out For Coffeen Power Plant

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Texas-based Vistra Energy, a company that merged with Dynegy less than two years ago, announced Wednesday morning, Aug. 21, that it was shutting down four Illinois power plants, including 54-year-old Coffeen Power Station.

Employees at Coffeen were notified during a meeting at 7 a.m. Wednesday that the plant would shut down by the end of the year, likely in November.  A press release announcing the closure went out at 7:45 a.m.

According to the release, 95 employees at Coffeen lost their jobs, 60 at Duck Creek in Canton, 75 at Havana, and 60 at Hennepin.  The company said it is providing outplacement services and working with state agencies to assist impacted employees.

With the spectre of closure for the biggest economic engine in Montgomery County looming for several months, local officials are now scrambling to deal with the loss of nearly 100 jobs.  Vistra has scheduled a meeting with local officials for Thursday morning.

"We are in constant contact with the Vistra representatives," Montgomery County Board Chairman Evan Young said Wednesday. "There are many questions that we hope to have answered in a meeting Thursday with Vistra. We are studying the financial aspect and mapping the anticipated impact on all taxing bodies to create a plan that will ease the financial burden this closure will create. We are working with local officials from the state and the Montgomery County Economic Development Corporation  (MCEDC) to ensure a response and transition plan is in place to support families in Montgomery County."

Montgomery County Economic Development Program Coordinator Valerie Belusko said the MCEDC, along with other leaders in Montgomery County, "has been working diligently to keep the cleanest burning power plant in the world open.  Unfortunately being clean also means higher operating costs for the plant, so we have been aware that the shutdown was probable.

"We hope that the meeting with Vistra management on Thursday morning will answer the many questions we have regarding the timeline for plant retirement, information on if and when our plant will be able to participate in the transition to a solar site or battery storage site, impact on revenue for taxing bodies, decommissioning plan, and worker relocation plans," Belusko said. "Thursday evening the MCEDC board will be meeting to discuss the situation and formulate a plan to best help all of the entities and individuals that will be affected by the closure of this plant."

When at peak production and profitability, Coffeen Power Station represented one-third of the local tax base of the Hillsboro School District.

"The power plant provided $2.8 million in revenue to the Hillsboro School District in fiscal year 2019 and $2 million in revenue this year," according to Superintendent David Powell.  "The closure of the plant will be a significant financial blow to the district. Over time, the revenue we receive from the state will increase as a result of this significant decrease in our tax base. I will be working with financial staff at the state board to make sure we understand the timing and scale of that increase." 

According to a 2014 Dynegy study, the Coffeen Power Station contributed an estimated $79 million in household earnings in Montgomery and surrounding counties, and an estimated $389 million in total economic activity.

This year, Vistra Energy has already paid its $2.3 million property tax bill in Montgomery County, the largest paid in the county by about seven-fold, but a little less than half of the property taxes the plant paid just two years ago.

In its Wednesday morning press release, Vistra blamed the four plant closures on "requirements of the recently approved revisions to the Multi-Pollutant Standard (MPS) rule imposed by the Illinois Pollution Control Board (IPCB),"  but also admitted in the very next sentence, "without this rule change, the company's entire downstate fleet was at risk of near imminent retirement."

In 2017, Dynegy had asked the IPCB to change existing emissions caps from percentage-based rates to a total tonnage standard.  Critics argued that the move would allow the company to shutter plants like Coffeen–awarded in 2016 as the world's cleanest coal plant–and still meet the new tonnage standards.

On June 20, the IPCB approved the tonnage standard–albeit with lower emissions caps than originally proposed–but also required Vistra to retire 2,000 megawatts of its Illinois coal generation by the end of 2019.  Coffeen's 915 megawatt plant represents nearly half of that total.  Duck Creek, Havana and Hennepin total 1,153 megawatts of production.

Vistra said closure of the four plants will reduce sulfur dioxide emissions by 57 percent and nitrogen oxides by 61 percent from what was allowed under the former MPS rule.  While not explicitly required by the MPS, the company claims carbon dioxide emissions will be reduced by about 40 percent of the 2018 levels.

"Even though today's retirement announcements were inevitable due to the changing regulatory environment and unfavorable economic conditions in the MISO market, they are nonetheless difficult to make," according to Vistra president and CEO Curt Morgan. "By far, the hardest decisions we make in our business are those that significantly impact our people. As always, we will do right by those who are impacted by this announcement. Our employees take pride in the work they do, and we appreciate their decades of service providing reliable and affordable power to Illinois, particularly in years like this one with periods of extreme cold and heat."

Both State Sen. Andy Manar and State Rep. Avery Bourne pledged job training and placement help to impacted employees, but one blamed "utility executives and state bureaucrats" for the closures and the other blamed Democrats.

"Today we see the effects of a Democratic governor and Democratic super-majorities who prioritize a radical environmental agenda over affordable energy and good-paying jobs," Bourne said.  "During his campaign, Governor Pritzker promised to completely eradicate coal and this is the first step. I'm disappointed that the Pritzker administration forced Vistra to close 40 percent of their downstate fleet of power plants."

According to Manar, "Closing down the cleanest coal-fired power plant in the world makes zero sense. Today, Vistra, the Illinois EPA and Pollution Control Board together failed the environment. Shame on the Pollution Control Board for not doing its homework and allowing this to happen. If power plants are to be closed, the worst polluters should close first."

Built by Central Illinois Public Service (CIPS), the 365-megawatt Unit 1 at Coffeen Power Station was synchronized to the power grid on Nov. 13, 1965, and declared commercial on Dec. 10.  Unit 2, producing 625 megawatts, was declared commercial six years later in 1972.

That plant became part of Ameren Energy Generating in 1997, and that company invested over $900 million in upgrades, including sulphur "scrubbers" in 2009 and 2010.

Dynegy took over Coffeen and four other Illinois coal-fired plants in early 2014 by assuming some $850 million in Ameren debt.  In 2017, the merger with Vistra Energy was announced, a deal that was completed on April 9, 2018.

As part of the four-plant closure process announced Wednesday, Vistra is filing the required notices with MISO, PJM, and the Federal Energy Regulatory Commission. If it is determined that the units are not needed for reliability, the company expects to cease operations at all four sites by the end of the year. The company will take the necessary steps to responsibly decommission the facilities in accordance with all federal and state regulations.

Vistra will continue to push for the "coal to solar and energy storage act" legislation during the Illinois General Assembly fall veto session for incentives to repurpose coal-fueled power plant sites into solar and battery energy storage facilities. According to Vistra, the legislation would allow the company to reuse substantial transmission infrastructure and its existing footprint of available land at its coal-fueled power plants to develop renewable energy facilities, mitigating employment and property tax impacts to plant communities and helping Illinois meet its clean energy goals.

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