Saying there is a danger of the whole FutureGen 2.0 coal project collapsing, AmerenEnergy Medina Valley Cogen LLC and the FutureGen Industrial Alliance on July 16 asked the Illinois Pollution Control Board for a quick review of their motion to dismiss an air permit complaint from the Sierra Club.
The Sierra Club told the board in a June complaint that certain Prevention of Significant Deterioration (PSD) factors should have been considered in the air permitting for this clean coal project, which involves a repowering of a unit at Ameren’s shut Meredosia power plant with oxy-combustion coal-firing technology.
“Time is of the essence in this case,” AmerenEnergy and FutureGen told the board. “One billion dollars ($1B) in contractually-obligated government funding and seven hundred million ($700M) in commercial financing is at stake if this case is not resolved expeditiously. The Sierra Club filed the complaint in this case alleging that Defendants lack permits necessary to begin construction (‘Claim’) shortly after the United States District Court for the Central District of Illinois (‘U.S. District Court’) dismissed an identical claim. The existence of this baseless Claim impedes the Defendants’ ability to finance and construct the FutureGen 2.0 Project (‘Project’) at Ameren’s existing Meredosia Energy Center in Meredosia, Illinois, which is a state-of-the-art clean coal demonstration project funded in part by the United States Department of Energy (‘USDOE’).”
They noted that USDOE awarded its $1bn in funding in 2010 and that under federal law this money must be expended by the USDOE within five years of the end of the availability of the appropriation, which is Sept. 30, 2015. “The completion of the commercial financing transaction, and thus major construction spending, cannot occur prior to resolution of the instant case,” they added.
During March and April, the FutureGen alliance commenced a major effort to obtain equity funding for the project to satisfy USDOE requirements. “The equity markets are extremely sensitive to risks posed by litigation delays, such as those posed by the pending Complaint. The Alliance has also commenced a major Project financing effort involving the debt markets. The debt markets are even more sensitive to litigation delays than equity markets. Simply put, the mere presence of the Complaint is damaging to the Project and threatens the Alliance’s ability to obtain the private-sector financing necessary for the Project to advance.”
Kenneth Humphreys Jr., the chief executive officer of the FutureGen alliance, added in supporting testimony: “In addition to the impact of the Claim on financing, litigation delays associated with the Claim subject the Project to greater cost uncertainty. Project vendors are subject to market forces and price their services based on current or anticipated market costs and the availability of sub-contractor services and equipment. Litigation delay increases the risk that the Alliance will be unable to obtain timely and economical agreements with vendors, or worse, that essential equipment or services will become unavailable.”
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.
The FutureGen 2.0 project features a pipeline that will transport the CO2 produced and captured by the power plant and the storage facility where the CO2 will be injected into a deep geologic formation for permanent storage.
Said the separate AmerenEnergy/FutureGen motion for a summary dismissal of this complaint related to Illinois Environmental Protection Agency (IEPA) permitting: “The questions present in this case are questions of law, not fact. There is no dispute that IEPA has issued a Minor Source Construction Permit for the Project. Defendants’ construction of the Project pursuant to the terms of this Permit is lawful and Sierra Club presents no arguments to the contrary. The Project is not subject to federal PSD permit requirements under [federal code], Sierra Club’s assertions to the contrary are without merit, and its claim should be summarily denied.”