Clean-coal plant gets fed help

Customers of a giant electricity plant in central Illinois, planned by an Omaha company, would benefit from the largest federal tax credit ever granted for a single project, the company said Tuesday.

Tenaska Inc. said the $417 million federal investment tax credit would reduce the overall rate hike for customers of the Taylorville (Ill.) Energy Center under a clean-coal program run by the Department of Energy and the U.S. Treasury. Illinois' clean coal law calls for the savings to be passed on to the plant's customers, Tenaska said.

The Taylorville Energy Center would be the cleanest coal-fired commercial-scale power plant in the nation, Tenaska said. State agencies, including the Illinois Legislature, are in final review stages before construction can begin.

The $3.5 billion power plant would turn coal into a gas before burning, then capture at least 65 percent of the carbon dioxide it produces, making its emissions about the same as a comparable natural gas-fired plant.

It may be the first such plant to capture that much of its carbon dioxide, proving that the technology is feasible for large coal-fired plants. The tax credit is intended to encourage clean-coal development by offsetting some of the costs of capturing and storing the carbon dioxide.

The tax credit award came as the Department of Energy certified that the project is technically and economically feasible and that it can capture at least 65 percent of the carbon dioxide, Tenaska said.

A report on the project estimated that it would increase residential customers' rates by 1.8 percent, or about 6 cents a day, and reduce carbon dioxide emissions by nearly 2 million tons per year starting in 2015 when the plant is completed, Tenaska said. That's below the 2.015 percent limit for rate increases set in the Illinois law.

Bart Ford, a Tenaska vice president, said the tax benefit would help hold down electric rates and validates the company's design and approach to the project. The project also qualified for a federal loan guarantee, which will reduce its costs.

Tenaska also is building a clean-coal plant in Nolan County, Texas.

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