Dynegy to pay for grid upgrades to aid Baldwin coal plant in Illinois

Ameren Illinois on Dec. 11 filed with the Federal Energy Regulatory Commission an executed transmission Construction and Payment Agreement related to a project that will allow higher utilization of the 1,800-MW, coal-fired Baldwin power plant of Dynegy (NYSE: DYN).

The agreement is between Ameren Illinois, Dynegy Midwest Generation LLC (DMG) and the Midcontinent Independent System Operator.

“Ameren Illinois and DMG have negotiated the Construction Agreement to address the construction of certain investments in the transmission system owned by Ameren Illinois that were requested to be constructed by DMG,” said the filing. “Under the terms of the Construction Agreement, described further below, Ameren Illinois will construct, and DMG will pay for, certain transmission upgrades to increase the deliverability of DMG’s Baldwin generating station, an 1,800 MW generating facility in Baldwin, Illinois. As a ‘market participant funded’ transmission upgrade project, MISO does not currently have a pro forma agreement or terms and conditions for such investments. Ameren Illinois and DMG therefore negotiated an arms-length agreement to address DMG’s willingness to voluntarily pay for these upgrades.”

These projects include upgrading a transformer and reconductoring five segments of transmission lines on the Ameren Illinois system. The schedule calls for these projects to be completed between June 2015 and June 2017.

Said Dynegy in its Nov. 6 quarterly Form 10-Q report about this plan: “Based on analysis of historical constraints near our generating facilities, we have identified opportunities to invest in transmission facilities upgrades which will help to mitigate the impact of congestion around our Baldwin plant. We are working with the transmission owner to potentially implement these upgrades. We continue to assess grid constraints impacting our other facilities to identify other opportunities to reduce congestion and improve [locational marginal prices] at our Coal and [Illinois Power Holdings] facilities.”

The IPH segment consists of five coal plants in Illinois, totaling 4,062 MW. The Coffeen, Edwards, Duck Creek and Newton facilities are located in the MISO region. Joppa is located within its own control area, known as EEI.

The Coal segment consists of four plants (Hennepin, Havana, Wood River and Baldwin), all located in the MISO region and totaling 2,980 MW.

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.