Power companies to appeal FutureGen financing plan

Associated Press

CHAMPAIGN, Ill. (AP) -- Power suppliers including Commonwealth Edison are challenging a state-approved plan to help finance the $1.6 billion FutureGen clean-coal project by charging Illinois electricity customers, saying regulators lack the authority to force customers to pay for a project that the companies believe isn't needed.

ComEd filed a notice last week of its intent to challenge the surcharge, which was approved by the Illinois Commerce Commission in December. The 10 market-power companies that make up the Illinois Competitive Energy Association planned to file their notice Thursday.

The notices were filed with the Illinois Appellate Court, which hears appeals of commission decisions.

The money — an estimated $1 to $1.40 a month on residential electricity customers' bills — would help finance the FutureGen project, which calls for refitting an existing coal-fired plant in Meredosia in western Illinois to burn coal without high emissions of carbon dioxide. The U.S. Department of Energy has pledged $1 billion, leaving the remainder, roughly $600,000, to be covered by FutureGen.

ICEA President Kevin Wright said Thursday that he believes the state commerce commission can't legally make electricity customers help pay for the project.

"We're just really concerned that the commission has exceeded its authority and, for me, I'm particularly concerned about the precedent this sets," he said. "That these unneeded, above-market-price projects will use the same avenue that FutureGen did to get financed when the private market won't. Private investment isn't going to fund these projects because there's no need for them."

ComEd, which is not among the power companies in the ICEA, says it doesn't believe its customers should be forced to help finance FutureGen.

"ComEd has long believed that competitive markets will work in the best interests of our customers," ComEd spokesman David O'Dowd said in an emailed statement. "So we are concerned about the negative impact on our customers from a requirement that would force utilities to buy subsidized generation at above-market prices."

Commerce Commission spokeswoman Beth Bosch said the agency knows about the planned appeals but hasn't yet seen the arguments on which they'll be based.

The FutureGen Alliance, the group of coal companies and others that have been working to get FutureGen built for years, expects the finance plan to survive the appeal.

"Appeals are a normal part of the process and will be resolved in due time," the alliance's CEO, Ken Humphreys, said in a brief statement. He added that the project will continue "without disruption."

FutureGen has been the subject of political and financial difficulties for years.

It was initially proposed as a new power plant to be built near Mattoon in eastern Illinois that would have burned coal that had been cleaned up carbon dioxide. The CO2, a greenhouse gas linked to global warming, would then have been stored underground.

The Bush administration started FutureGen but scrapped that plan over rising costs. But longtime backers including U.S. Sen. Dick Durbin complained that politics — Illinois was chosen over sites in Bush's home state, Texas — rather than finances had killed the project.

The current project calls for refitting the existing coal-fired plant and storing CO2 in underground locations nearby. Construction is scheduled to start in 2014 with the plant starting production in 2017, according to FutureGen.

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