Bill Knight | Market forces, climate change, lawsuits drive closure of coal fired power plants



It was a slap in the face but no shock when Texas-based Vistra Energy announced its closing of somewhat modernized coal-burning power plants near Canton, Coffeen, Havana and Hennepin, Ill., to meet terms of a deal negotiated with the state, but that the comparably filthy Edwards plant south of Bartonville would stay open.

The real shock came Sept. 16, when the Sierra Club and other environmental groups disclosed an Aug. 30 consent decree proposing a settlement of a 2013 lawsuit that will also close Edwards in three years.

The public will literally breathe a bit easier, as the shutdowns will cut millions of pounds of climate-changing carbon dioxide and sulfur dioxide emissions annually.

Vistra last year became Illinois’ biggest producer of coal-burning electricity when it bought power plants from Dynegy Inc., but the coal industry faces dwindling customers and legal woes, like the six-year-old Clean Air Act lawsuit.

If approved by the Department of Justice, the U.S. Environmental Protection Agency, the U.S. District Court for the Central District of Illinois, and Midcontinent Independent System Operator (MISO, which operates the regional power grid), the settlement would provide for retiring the Edwards plant by Dec. 31, 2022.

“After many years of hard work – attending hearings, press events, lobby days, speaking with elected officials, sending in letters to the editor – our efforts have finally paid off,” said Ryan Hidden of the Heart of Illinois Sierra Club.

The market for coal-based energy isn’t sustainable. Moody’s Investor Service in August blamed economic, environmental and social factors in its “negative outlook for the North American coal industry. Profitability will worsen in the next 12-18 months.” Also, the country’s largest commercial insurer, Chubb, last month became the first U.S. insurance company to restrict coal insurance, announcing it “recognizes the reality of climate change [and] will not underwrite risks related to the construction and operation of new coal-fired plants.”

On the same day as the Edwards announcement, U.S. Reps. Darin LaHood, R.-Peoria, Mike Bost, R.-Murphysboro, and Rodney Davis, R.-Taylorville, co-signed a letter to the Federal Energy Regulatory Commission asking for a review of the Vistra closures as part of what they see as “Illinois’ politically driven anti-coal approach to energy policy.” The Congressmen said they favor an “all-of-the-above” energy approach.

Meanwhile, final details of the Edwards settlement are expected to be made public by Oct. 3, but plaintiffs’ representatives say proposed terms include Vistra:

  • setting aside $6.88 million for projects for public health or environmental projects that benefit Central Illinois, such as funding for electric buses, energy-efficiency improvements, solar-power projects and programs to improve lung health;
  • paying $3 million toward legal expenses; and
  • providing $1.72 million for economic transition, mainly in job training at area schools and community organizations.

That provision is significant since other communities affected by Vistra shutdowns haven’t received such assurances, and 11 coal-fired power plants remain open in Illinois, including Vistra facilities in Baldwin, Joppa and Newton, Ill. State Sen. Dave Koehler, D.-Peoria, says the state has an obligation to help those affected.

“As we transition to an energy economy that focuses on limiting emissions,” he said, “we must be proactive in helping communities that [closures] will adversely affect. If we know this is causing hardship, then we [need to] make sure we make up some of that difference. We have to make sure counties like Fulton County aren’t paying the price alone,”

For instance, Fulton County this year received almost $2 million in property taxes from Vistra, and financial repercussions from lost employment will affect sales and income taxes, too.

Koehler says he and State Sen. Andy Manar, D.-Bunker Hill, are drafting a bill addressing such shutdowns.

“We should ‘hold harmless’ taxing bodies, from counties to schools,” he says.

Koehler says he’d also like to consider incentives for converting from coal but concedes there’s pushback from environmentalists who think that’s too beneficial to companies.

Legislation on the issue also has faced resistance from business for years.

Ten years ago, Illinois coal operators agreed to clean up or shut down by now, but corporations convinced regulators to extend deadlines. In 2017, former-Gov. Bruce Rauner proposed making it easier to keep operating the dirtiest but less expensive coal plants, but current Gov. JB Pritzker dropped that after objections from Illinois Attorney General Kwame Raoul’s office and others.

Now, Vistra is pushing the Illinois Coal-to-Solar & Energy Storage Act, which would have taxpayers subsidize coal operators’ move to solar generation on shuttered properties.

“It is encouraging to see that even a fossil fuel company like Vistra is beginning to see the writing on the wall, that coal is on the way out,” said J.C. Kibbey of the Natural Resources Defense Council. “I think that’s a welcome change.”

But the Coal to Solar bill is “a potential $140 million a year coal bailout,” he added.

Meanwhile, clean-energy groups are promoting the Clean Energy Jobs Act, a bill funding assistance to laid-off workers and local governments handling lost revenue. Supporters from hundreds of green businesses, consumer-advocate organizations and environmental groups say the CEJA (which lawmakers didn’t get to in their spring session) would boost energy efficiency, take advantage of better costs for solar and wind power, and enact market reforms to ensure ratepayers aren’t saddled with higher energy prices.

“Illinois needs to pass the Clean Energy Jobs Act as soon as possible,” says Heart of Illinois conservation chairwoman Joyce Blumenshine. “The Clean Energy Jobs Act includes provisions for transition planning so that workers and communities are not left in the lurch. It is the best pathway forward so for-profit corporations don’t keep shifting more costs for public health and the environment on the public.”

For the moment, Hidden is celebrating.

“After years and years of Edwards polluting our community, we will finally be transitioning to clean energy in Peoria,” he says. “This is a huge victory for public health, our climate and our environment.”

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