Monday, November 2, 2009 11:07 PM CST
Progress encourages FutureGen exec
By BILL LAIR, Managing Editor
blair@jg-tc.com
MATTOON — Michael Mudd said FutureGen officials will continue working on an electricity purchase agreement with the State of Illinois.
Mudd, the CEO of the FutureGen Alliance, said the Senate Energy Committee last week approved a bill that would authorize the state to buy electricity from the proposed FutureGen power plant to be used for state facilities.
But the Legislature’s fall veto session ended before the full Senate could vote on the bill.
While there were questions about the potential cost, Mudd said Monday the state would pay no more than utilities will pay under an agreement with another Central Illinois power plant still in development.
One of the items U.S. Department of Energy officials would like for FutureGen to address before federal funding for the plant is finalized this winter is a market for electricity produced at the plant planned west of Mattoon.
Mudd was in Springfield last week in an effort to finalize a deal in which the State of Illinois would buy FutureGen-produced electricity for state-owned facilities.
Lawmakers could vote on the matter when they return in January, which is when the federal government is expected to make a decision on continuing the public-private $2.3-billion project.
“We are encouraged,” Mudd said Monday. “We have to rely on the fact there is progress and continue to have discussions with the state.”
Mudd said some members of the Senate Energy Committee wanted specific figures on the FutureGen energy costs.
“It’s unknown exactly what the costs will be,” Mudd said of power from an experimental plant that won’t be online until, perhaps, 2014 or 2015.
“If anyone can say what the price of gas, natural gas, coal or electricity will be in four years, good for them,” Mudd said.
But Mudd and state Sen. Dale Righter, R-Mattoon, said the proposed agreement is similar to one the Legislature approved for the Tenaska coal-fired plant planned in Taylorville. That agreement requires utility companies to buy electricity from Tenaska and puts a cap of about 2 percent over other electricity costs as a maximum.
“The state will be paying no more for (FutureGen) power than the rate paid to Tenaska,” Mudd said.
The state also benefits from the same agreement in which Illinois assumes any liability, according to Mudd. As part of the agreement, he said, the state also has all rights to the carbon dioxide that will be sequestered.
If the carbon credit proposal is adopted by the federal government, any carbon credits earned by FutureGen belong to the state and can be sold to other entities that may need to purchase a credit.
“That should result in a lower cost for the state,” Mudd said.
Righter said it is understandable that lawmakers and Illinois residents are concerned about electricity costs because of the state’s budget situation and consumers’ utility bills.
“When the agreement with DOE was announced (last summer), we talked about challenges,” Mudd said. “This is one of the challenges to assure funding viability.”
Righter said a market for the electricity is a major issue.
“It’s pretty important but if it’s (the sale to the state) not guaranteed by January, I don’t think it’s a drop-dead issue.”
Contact Bill Lair at blair@jg-tc.com or 238-6865
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