To qualify for the credit, the DoE was required to evaluate competing projects and certify that TEC is both technically and economically “feasible” and that it can be operated to capture at least 65% of its carbon dioxide (CO2) emissions. Following its evaluation, DoE certified the project and ranked TEC first among bituminous coal projects, enabling the plant to receive this significant federal tax credit.
The TEC, estimated to cost $3.5 billion, will be the cleanest coal-fed commercial scale power plant in the United States, converting Illinois coal into substitute natural gas, and then cleanly and efficiently burning the gas to produce electricity. TEC will create 2,500 construction jobs and hundreds of permanent jobs, according to an extensive engineering study and Facility Cost Report prepared under the Clean Coal Law.
This 1,800-page report, the work of more than a dozen nationally renowned engineering and consulting firms, concluded that the plant would result in an average projected rate impact of approximately 1.8% for the utilities’ residential customers, adding about $0.06 a day to a typical customer’s bill. The report demonstrated that the project would create more jobs than previously estimated, with 10 million labor hours required to build the plant. It also found that TEC would reduce the state’s CO2 emissions by nearly 2 million tons per year.
Under the Clean Coal Law, purchases from TEC are not permitted to cause utility residential rates to increase by more than 2.015%. Electricity customers would see no impact on their bills until mid-2015, when the project is slated for completion.
“Not only will this substantial federal benefit help us hold the line on electric rates, it validates our design and commercial approach,” said Bart Ford, vice president, Tenaska. “Over the next several months, Tenaska will be working through a number of issues to confirm the project’s ability to take advantage of the awarded tax credit.”
Tenaska announced last year TEC was selected in a competitive process for term sheet negotiations for a $2.579 billion DoE loan guarantee. When finalized, the loan guarantee would put total federal support for the project at nearly $3 billion.
The Illinois Commerce Commission (ICC) is currently reviewing the Facility Cost Report, which was completed in February with funding from the Illinois Department of Commerce and Economic Opportunity. The next step is for the Illinois General Assembly to give its final approval after it receives the ICC’s evaluation of the Facility Cost Report.
Ford noted DoE support for the Taylorville project fits into President Obama’s February 2010 mandate calling upon DoE and other government agencies (collectively known as the Interagency Carbon Capture and Sequestration Task Force) to develop a comprehensive strategy to speed the development of safe, affordable and broadly deployable carbon capture and storage technologies, with a goal of putting five to 10
commercial sized clean coal projects in operation by 2016. “We believe that TEC is one of the very few projects nationally that has a real chance to meet President Obama’s target,”