WIUM Tristates Public Radio

Chicago Power Plant, Downstate Rate Hikes

Jul 5, 2012

Downstate Illinois and suburban customers could see natural gas rates increase if Governor Pat Quinn signs legislation (SB 3766) intended to help a proposed power plant in Chicago.

That is the assertion from manufacturing, agricultural and environmental groups.

"This will increase the cost of natural gas $8.5 billion to build a synthetic natural gas plant on the south side of Chicago -- long-term, 30-year, sweetheart contract that is on the governor's desk," said Mark Denzler of the Illinois Manufacturers' Association.

Leucadia Energy's plant would convert coal into natural gas. But natural gas prices are at an all-time low so the company is trying to lock in above-market prices for natural gas utilities Ameren and Nicor.

The measure before Quinn would force Ameren and Nicor to buy Leucadia's higher-priced gas.

Opponents of the plant say Ameren and Nicor will pass those costs on to their residential and business customers, who are located downstate and in the suburbs.

There are also environmental concerns about the plant. Activists say coal-gasification plants create more pollution than regular coal plants.

Leucadia said the plant would be a $3 billion investment in Illinois. The company also said it would bring clean energy and new jobs.

Thanks to Illinois Public Radio