Gov Quinn Signs Bill to Create Coal Gasification Plant in Southern Illinois

Governor Quinn Signs Law to Advance Clean Energy Project in Southern Illinois

Power Holdings Project Will Provide Major Boost to Regional

Economy and Create More Than 1,650 Jobs



MT. VERNON – August 2, 2011. Governor Pat Quinn today signed legislation that will help develop a state-of-the-art coal gasification facility in southern Illinois, creating 1,650 jobs and reducing carbon emissions by an estimated 90 percent. Following principles the Governor outlined in the spring legislative session, the new law will ensure consumer protections, create jobs and safeguard the environment.

“This important project will help revive the coal industry in southern Illinois while ensuring that Illinois remains a leader in the development of state-of-the-art, clean energy facilities,” Governor Quinn said. “We must continue to do everything we can to strengthen the state’s ongoing economic recovery through projects that create jobs while safeguarding the environment and protecting consumers.”

Senate Bill 2169, sponsored by Sen. James Clayborne, Jr. (D-East St. Louis) and former Rep. Dan Reitz (D-Steeleville), provides the framework for Power Holdings LLC to build a $2.3 billion facility in Jefferson County that will convert coal to pipeline-quality synthesis natural gas (SNG). The new law will utilize a pricing formula that shields customers throughout Illinois from historically volatile swings in the cost of heating their homes with natural gas from traditional sources.

Power Holdings, which has already obtained an active air quality permit from the Illinois Environmental Protection Agency, will use an ultra-clean coal gasification technology for removal of harmful gases and set a new standard for commercial energy projects by capturing and safely storing more than 90 percent of the plant's carbon emissions.

Power Holdings expects to generate more than $10 billion in economic activity and create more than 1,650 jobs, including approximately 1,100 construction jobs, 300 permanent mining and 250 permanent plant jobs. The plant will use at least four million tons of Illinois coal per year.

“Projects like Power Holdings provide us with a rare opportunity to hedge our own future prices for natural gas, using an affordable domestic resource, Illinois coal, which will be mined just a few miles away,” Illinois Department of Commerce and Economic Opportunity Director Warren Ribley said.

The legislation, which takes effect immediately, was modified from a previous bill considered earlier this year to include input from the Governor, the Citizens Utility Board, and other stakeholders. The new law includes significant consumer protections, including a rate cap and a reconciliation account to pass savings back to consumers. Power Holdings will also have to prove to state regulators that its construction and carbon sequestration costs, as well as operating expenses, are reasonable through annual reports and plant reviews. Pricing based on those costs will be guaranteed for 10 years, and Illinois' natural gas distributors will spread those costs evenly across their customer bases.