ComEd loses court appeal over FutureGen 2.0 power buys

Commonwealth Edison (ComEd), the Illinois Competitive Energy Association (ICEA), and Illinois Industrial Energy Consumers (IIEC) on July 22 lost a decision out of the Illinois Appellate Court over the FutureGen 2.0 clean coal project.

They had appealed an order of the Illinois Commerce Commission that requires ComEd to enter into a sourcing agreement to procure electricity for the retail customers of alternative retail electric suppliers (ARES) and recoup the costs through a “competitively neutral” charge. On appeal, these entities contended that the commission violated section 16-111.5 of the stare Public Utilities Act when it ordered ComEd to enter into a sourcing agreement to procure electricity for customers other than its own “eligible retail customers” and rendered its decision without substantial support from the record.

The commission issued its final order in December 2012. ComEd filed for rehearing on Jan. 22, 2013, and a joint motion for clarification of the final order. On Jan. 29, 2013, the commission denied the application for rehearing but granted the motion for clarification and, on the same day, issued an amendatory order. On Feb. 22, 2013, ComEd filed a notice of appeal to the court.

Appellants argued that the Commission’s order is unconstitutional because it requires ComEd to enter into a sourcing agreement for clean-coal energy with FutureGen 2.0, an Illinois facility that involves a repowering of a shut unit of the Meredosia power plant, effectively excluding from consideration out-of-state clean electric sources. They allege that the order also has a discriminatory effect because 70% of the rate cap imposed on ComEd for clean coal electricity is devoted to FutureGen 2.0’s output, “leaving little room for any [other competitors] to place their clean coal electricity on the Illinois market.” It thus prevents customers from obtaining less costly clean coal electricity procured from out-of-state sources, in violation of the dormant commerce clause, they said.

“Neither ICEA/IIEC or ComEd claim an interest in producing clean coal electricity,” the court ruled. “Furthermore, neither party has shown a direct, material injury that would result from enforcement of the provision. In fact, the Commission has not had the opportunity to enforce the provision since the FutureGen 2.0 facility is not yet operable. Therefore, we find that ICEA/IIEC and ComEd do not have standing to challenge the constitutionality of the provision at this time and, accordingly, we decline to address the issue here.”

The FutureGen Industrial Alliance lately has been trying to line up project financing to supplement a U.S. Department of Energy Funding award. The repowered unit, at 168 MWe (gross) in size, would include oxy-combustion and carbon capture technologies provided by the Babcock & Wilcox Power Generation Group and Air Liquide Process and Construction. Members of the alliance include some of the largest coal producers, coal users, and coal equipment suppliers in the world.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.