Ameren Corp. says stricter clean air rules that take effect next year are forcing it to shutter two of its oldest Illinois power plants by the year's end and eliminate 90 jobs.
The 70-year-old plants at Meredosia and Hutsonville, Ill., have run sporadically over the past few years because they are the least efficient in the company's fleet and don't produce electricity cheap enough to sell in a weak power market.
Ameren said new regulations finalized by the Environmental Protection Agency this summer were the primary reason it was choosing to permanently mothball them. The rules require steep cuts in power plant emissions that contribute to ozone and fine particle pollution. To a lesser extent, the company said, it's hamstrung by the regional grid operator's rules that prevent it from selling the plant's generating capacity more than a year in advance.
"We cannot continue to economically operate these units," Steven R. Sullivan, head of Ameren Energy Resources Co., said in a statement. "Numerous options to bring these units into compliance were explored, including installing additional environmental controls, but the costs were just too high to be justified."
Utilities across the country have announced the closure of dozens of older coal-fired power plants in recent weeks, frequently blaming EPA regulations. The closures and related job losses have become political fodder for conservative lawmakers who assert that the regulatory agenda by the administration of President Barack Obama is damaging an already feeble economy.
Environmental and public health advocacy groups reject the argument.
"It's wildly disingenuous," said Henry Henderson, who heads the Natural Resources Defense Council's Chicago office. "There is a design life to engineered equipment, and these old plants are past their design life."
The older coal plants being shut down around the country are the dirtiest and most responsible for poor air quality and respiratory disease linked to thousands of premature deaths, he said. Also, lost generation capacity is being replaced by new renewable energy sources and energy efficiency projects, which are creating new jobs.
Ameren's Meredosia plant, about an hour west of Springfield, dates to the 1940s.
The plant began generating electricity in 1948, and additional generating capacity was installed incrementally until the mid-1970s.
Ameren has already closed two of Meredosia's four units. One of the units runs on coal, the other on fuel oil. Together they can generate 369 megawatts — one fourth the size of the Prairie State coal plant being constructed in Southern Illinois.
The 151-megawatt Hutsonville plant, on the Indiana border, is even older. The coal-fired plant began producing power in 1940, and it was completed in the 1950s. Ameren shut two of its four generating units in the early 1980s.
Combined, the power plants produced just 4 percent of Ameren's generation in Illinois over the past two years. They contributed even less to the company's bottom line. Ameren tried to sell the plants a few years ago but couldn't find any buyers.
At least one of the Ameren sites could find new life even after it's closed. Just over a year ago, Meredosia was selected as the site of the federal government's revamped FutureGen initiative, a next-generation coal-fueled power plant able to capture much of its carbon dioxide emissions. Ameren said the closure of the plant, which has been partially closed for the past several years, wouldn't affect the project.
Ameren said it submitted the first round of engineering, design studies and cost estimates for the FutureGen project in west central Illinois to the Department of Energy.
More than half of the project's $1.3 billion budget — $730 million — will go to retrofit one of plant's generating units. The rest of the budget is set aside for construction of a carbon dioxide pipeline and permanent underground storage.
Ameren declined to provide additional details, saying the next steps in the project would be decided after the Department of Energy's review, expected by Nov 30, company spokeswoman Susan Gallagher said.
Ameren will record an unspecified charge against third-quarter earnings as a result of the closures. The company said its net investment in the two plants totaled $27 million as of June 30.
It also expects to incur additional costs of closing the plants, including employee severance.
The company said it was trying to find other jobs within the company for the 22 managers and 68 union-represented employees affected by the plant closings.