Dynegy drops clean-air variance in conjunction with Edwards Unit 2 retirement

Dynegy (NYSE: DYN) subsidiary IPH LLC and AmerenEnergy Medina Valley Cogen LLC will file a motion Sept. 2 with the Illinois Pollution Control Board (IPCB) to terminate the dual variance from the SO2 annual emission rate limits provided in the Illinois Multi-Pollutant Standard (MPS).

The variance was originally granted in November 2013 in conjunction with IPH’s purchase of the coal-fired Coffeen, Duck Creek, Edwards, Joppa and Newton power stations. IPH has complied with all conditions of the variance, including retirement of Edwards Unit 1 on Jan. 1, 2016. In addition, IPH has operated in compliance with the SO2 limits in the MPS during 2016.

As previously announced, IPH plans to retire Newton Unit 2 on Sept. 15. This retirement, along with the use of dispatch management, will allow IPH to continue to comply with the SO2 limits in the MPS, thereby eliminating the need for the variance. The long-delayed SO2 scrubber construction project at Newton will also be terminated.

The initial variance was requested to allow for energy market conditions to improve to a point that supports building a scrubber. Additionally, needed capacity market changes that respect the unique competitive nature of Midcontinent ISO Zone 4 (Southern Illinois) have not occurred. Unfortunately, Dynegy said, Newton is and will continue to be unable to recover its basic operating costs, leading to the Unit 2 retirement.

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.