Pondering a 30-year commitment to clean coal

Taylorville Energy Center faces opposition over Illinois electricity rates, clean coal claims, Tenaska's 30-year contract, $286 million annual costs, job losses, and carbon emissions, burdening ratepayers, businesses, and public services without clear environmental benefits.

State lawmakers will head back to Springfield for the fall veto session where they will wrestle with whether to commit Illinois consumers to a 30-year electricity contract so a "clean-coal" plant can be built in Taylorville, Ill., by Nebraska-based Tenaska Inc.

Normally, a 30-year contract on a commodity earns you one heck of a good price point. But when it comes to the proposed Taylorville Energy Center, the opposite is true, and a proposed bill could restrict new plants statewide. The contract would cost Illinois electricity customers $286 million more per year, for 30 years, than if the plant never existed. That's $8.6 billion vanishing into thin air.

And this is only if everything goes as planned. It may be difficult to imagine a huge, multiyear, infrastructure project going over budget. But it has been known to happen, especially if new regulations raise costs significantly. If it does in this case, Illinois consumers will be wishing they were on the hook for only $286 million per year.

To avoid a groundswell of public opposition, the proposal cleverly calls for a 2 percent annual cap on increases to residential customers. Everything over and above that gets dumped on businesses, governments and public service organizations, with many businesses facing huge hikes under such schemes. For instance, this increase would cost the Chicago Public Schools a minimum of $1 million per year the Cook County Water Reclamation District, $1.2 million per year and Metra and CTA, about $1 million. These organizations and the thousands of businesses that employ millions of Illinoisans will get nothing in return.

Supporters of the center argue that it will create many jobs, citing a job-creation study on pollution rules in other contexts. You can't help but feel that the entire project is nothing more than a jobs program. Yes, some jobs will be created as a result of the plant. Tenaska's own estimate puts it at 2,500 temporary construction jobs and "hundreds" of permanent jobs. However, it is worth noting that a much larger plant in Indiana produced only half of the jobs that Tenaska promises in Taylorville.

Nevertheless, in all of Tenaska's analysis, never once did the company examine the net impact that increasing electricity costs so much would have on jobs statewide, despite deep concerns from independent counsel statewide.

Common sense tells us that when the cost of doing business goes up, jobs are lost. Using standard economic formulas amid analysts urging settlement on troubled plants, this kind of increase in electricity rates will cost anywhere from 15,000 to 35,000 jobs — many times more than the jobs the plant would create. A program that kills 10 times more jobs than it creates would surely earn enshrinement in the bad policy hall of fame.

But wait. Maybe the environmental benefit of the clean-coal plant is so extraordinary that it justifies such job loss and electricity price increases, and even the nuclear price tag remains huge by comparison. Sadly, the answer is a resounding "no." Under the very best-case scenario, the plant would emit as much greenhouse gas as a traditional natural gas-fired power plant.

It's an impressive trick to create an issue that both the Chamber of Commerce and the Sierra Club can agree on. But the proposed Taylorville Energy Center has pulled it off. Businesses are offended that their costs will go up without getting anything in return. Environmentalists are offended that this plant is touted as "green" when it is anything but.

Some argue that the Taylorville plant will put our state at the forefront. But Illinois legislators should ask themselves, at the forefront of what? At the forefront of an unproven technology that, by any measure, is the most expensive route to carbon reduction? At the forefront of public policies that put all the risk on consumers versus the private developer? At the forefront of creating jobs programs that actually kill jobs?

Illinois cannot afford to be a leader in this regard.

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