Sunday, September 2, 2012
Report Charges Downstate Coal Plant Will Raise Rates
Cost overruns at the Prairie State Energy Campus, a coal-fired power plant in southern Illinois, will cause higher rates for consumers, according to a report released this week. But defenders say the report’s findings are flawed because they are based on comparisons to current market rates.
The Prairie State Energy Campus, a 1,600-megawatt coal-fired plant about 40 miles southeast of St. Louis, has experienced project delays and increased construction costs, more than doubling the price tag to nearly $5 billion. The increased costs will raise consumer electric rates by at least 40 percent more than what investors originally expected, according to a report by the Massachusetts-based Institute for Energy Economics and Financial Analysis, which researches environmental and energy issues.
Peabody Energy announced plans for the plant in 2001, when the economy was better and demand for electricity was higher. Spokeswoman Meg Gallagher said the company still is reviewing the report but found its assertions biased and lacking important facts. “The report makes a number of assumptions on costs of competing fuels and uses this to make flawed estimates for a plant that will be in operation for decades. Even so, the cost of coal for Prairie State is less than half the cost of natural gas at a time when gas is at historically low levels this year,” she said in an email response.
You can read Jayette's full report at: http://watchdog.org/53227/il-report-calls-southern-illinois-coal-plant-an-unnecessary-financial-burden/