Coal Age

JAN 2013

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news continued "I think this was a major obstacle they had to overcome, and they did," Gonet said. The project "gives us an opportunity to advance the technology. We're in favor of anything that advances clean coal technology and our industry." The project involves retrofitting an idled oil-burning unit at Ameren's Meredosia plant with oxy-combustion technology to capture its carbon dioxide emissions. Then, the CO 2 would be sent via an underground pipeline to a permanent storage site about 30 miles away in Morgan County. The site would store up to 1.3 million metric tons of CO2 annually for 30 years. Midwest Generation Coal Will Operate as Planned Midwest Generation LLC's four coal-burning power plants in northern Illinois eventually will have new owners as a result of parent company Edison Mission Energy's December 17 bankruptcy filing. In the meantime, the plants, which burn low-sulfur Powder River Basin coal, are expected to continue operating as usual. In a voluntary Chapter 11 petition filed in a federal bankruptcy court in Chicago, EME listed assets of $5.13 billion and liabilities of $5.09 billion. Wells Fargo Bank was identified as the largest unsecured creditor but several coal companies, including Peabody Coal Sales, a subsidiary of Peabody Energy, and Arch Coal Sales, a subsidiary of Arch Coal, were among the 30 largest unsecured creditors. EME said it owed $591,406 to Peabody and $269,796 to Arch. Since it acquired six coal plants from Chicago-based Commonwealth Edison for more than $4 billion in 1999, Midwest Gen has operated as a merchant generator, selling power on the wholesale market. That market has been depressed since the depths of the United States' recession in 2008, which also reduced electricity demand, and merchant power peddlers like Midwest Gen have seen their profits plunge. In September, Midwest Gen prematurely retired two coal plants in Chicago, Crawford and Fisk, under a deal negotiated by Chicago Mayor Rahm Emanuel. For years, the two plants had been the target of environmentalists who claimed they were too polluting. Three of Midwest Gen's remaining four plants in Illinois—Will County, Waukegan and Joliet, are in the Chicago area, though not inside the city. The fourth plant, Powerton, is located near Pekin, across the Illinois River from Peoria. Together, their generating capacity exceeds 4,200 mw. Doug McFarlan, a Midwest Gen spokesman, said the plan is to operate the four plants during the bankruptcy, which could take two years to complete. In a statement, EME President Pedro Pizarro called the bankruptcy filing "an important first step in the process to reduce our debt, enhance our liquidity profile and position EME for continued operation." In addition to the coal plants in Illinois, EME owns more than 3,000 mw of additional natural gas-fired and wind generation in several other states. EME is owned by Edison International of Santa Ana, Calif. EME also faced expensive pollution control projects at the coal plants to comply with both state and federal clean air rules. Bankruptcy was viewed as a possible outcome for EME after Edison International executives said in a November 1 shareholder call that the company did not plan to make the major environmental investments. Then, in mid-November, EME essentially telegraphed the impending bankruptcy by disclosing in a federal Securities and Exchange Commission filing it had failed to make a $97 million interest pay- 18 www.coalage.com ment. EME said it would attempt to restructure its debt over the next 30 days but, if unsuccessful, most likely would file for bankruptcy. Pizarro claimed EME is "operationally healthy," and with the support of its creditors will emerge from bankruptcy "as a restructured company separate from Edison International." Turk Power Plant Goes into Commercial Operation The newest coal-burning power plant and first ultra-supercritical generating unit to go into commercial operation in the United States began churning out electricity in late December in Hempstead County, Ark., the home county of former President Bill Clinton. Southwestern Electric Power Co., a subsidiary of Columbus, Ohio-based American Electric Power, owns 73% of the 600-mw John W. Turk Jr. plant, which cost about $1.8 billion to build. Coowners include Arkansas Electric Cooperative Corp., 12%; East Texas Electric Cooperative, 8%; and Oklahoma Municipal Power Authority, 7%. Nicholas Akins, AEP president and CEO, said Turk will provide "reliable, affordable power for our customers and project partners and will provide significant benefits for the area's economy." The baseload plant is located on about 3,000 acres between Fulton and McNab. Construction got under way in November 2008, providing 2,200 construction jobs at peak employment in May 2011. The plant will have nearly 110 permanent employees, representing an annual payroll of $9 million. In Arkansas, the plant will serve Swepco's wholesale customers—the cities of Hope, Bentonville and Prescott—as well as Arkansas Electric Cooperative members, in southwestern Arkansas. Bentonville is the U.S. headquarters of Wal-Mart, the largest corporation in the country. Turk is expected to burn about 2.5 million tons of low-sulfur Powder River Basin coal annually. Several environmental groups fought the project for years, both in legal and regulatory venues. But an agreement in December 2011 formally ended their opposition to the project, allowing Swepco to complete construction. Under the deal, AEP agreed to phase out 528-mw Unit 2 at its Welsh coal plant in Texas, with a firm retirement deadline of 2016. AEP also agreed not to build any additional generation at the Turk site or construct any new coal-burning units at any location in Arkansas within 30 miles of Turk as long as the plant operates. The plant is named for John W. Turk Jr., who was president and CEO of Swepco from 1983-1988. Turk plant began commercial operations, December 20, 2012. January 2013

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