Tuesday, January 29, 2008

Energy bust

It very well could be too good to be true for Mattoon and the state, which lost federal support of the groundbreaking FutureGen coal power plant one month after winning the project. I thought something was peculiar when I listened to President George W. Bush’s last State of the Union speech Monday night. He mentioned the need “to build a future of energy security” and pioneering “a new generation of clean energy technology,” but he didn’t name FutureGen, an international project touted to do just that.

Mattoon was selected by the energy industry group, FutureGen Alliance, to host the $1.75 billion project capable of generating energy with much less pollution. It was to be an economic boon and an environmental breakthrough. The blow to Mattoon and the entire state came Tuesday after news of a meeting between the U.S. delegation of Sen. Dick Durbin and Rep. Tim Johnson and U.S. Energy Secretary Samuel Bodman, according to published reports.

Durbin said in a statement that the feds’ move was unmatched in “cruel deception.”

“After our meeting today it is clear that Secretary of Energy Sam Bodman has misled the people of Illinois, creating false hope in a FutureGen project which he has no intention of funding or supporting.”

Gov. Rod Blagojevich said in a statement that the state will not give up the fight to make FutureGen a reality in Illinois.

Even if Illinois were to fight and win a scaled-down version of FutureGen or another kind of clean coal technology project, it likely would cost a lot more than the original estimate. FutureGen Alliance’s Michael Mudd gave an online interview about the unknown reason the U.S. Department of Energy had yet to issue a decision by mid-January. But he also said the more delay, the higher the cost — as much as $10 million a month — because of inflation.

Editor’s note: The upcoming February issue of Illinois Issues has an article about FutureGen that was printed before it could be updated with today’s news. Watch the blog and our March issue for more updates.

Utility debate returns
Get ready for another round of energy debates involving natural gas and electricity rates for Commonwealth Edison and Ameren Illinois customers. A group of consumer advocates gathered Tuesday to say consumers have a voice and should get involved in the rate-setting debates before the Illinois Commerce Commission.

Ameren proposes collecting about $245 million from customers of all three subsidiaries to deliver natural gas and electricity. The utility also proposes something called “decoupling,” which would allow it to add a surcharge on natural gas delivery rates to make up for a decline in the average amount of therms used by customers. For instance, Beth Bosch of the Illinois Commerce Commission gave this example: If Illinois has a warm winter and Ameren Illinois customers use less heat, then the utility would lose money. There is a cost to deliver the natural gas no matter how much or little customers use, says Leigh Morris, Ameren Illinois spokesman. He adds the amount of the surcharge would be minimal. The proposal also could benefit customers in the opposite scenario: If Illinois had a colder than normal winter and the utility made more money, then customers could get a credit on their bills.

The Illinois attorney general opposes that billing scheme. Janice Dale, chief of the public utilities bureau in the AG’s office, says it’s “a plan to have customers pay for natural gas service that they won’t use.”

Dale joined AARP at a Statehouse news conference Tuesday. Along with the Citizens Utility Board, they want to organize opposition to proposed rate increases and ask customers to attend public hearings before the Illinois Commerce Commission accepts some, all or none of the rate increases. Any rate changes wouldn’t be effective until at least this fall, according to Bosch.

Morris says Ameren Illinois asks customers to participate with an open mind about the company’s proposal, considering those rates apply only to the cost of delivering the power, amounting to about 25 percent of customers’ bills. Last year’s political turmoil contributed to the company’s poor credit rating, which makes it more expensive to borrow money when other costs — equipment, operations, fuel — are increasing. The company also plans to spend $900 million on infrastructure through 2010. “A rate increase is essential to our ability to meet our mission,” he says.

Public hearings are scheduled for 7 p.m. throughout Ameren’s service area:
- February 4 at the Decatur Public Library
- February 6 at Marion’s Williamson County Pavilion
- February 13 at the Belleville City Council chambers
- February 19 at Peoria City Hall
- February 26 at the Quincy City Council chambers
- February 28 at the Champaign City Council chambers.

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