CHICAGO--()--Tenaska, managing partner of the Taylorville Energy Center (TEC), today released a rate impact analysis by Pace Global, an international energy consultancy. This analysis found that significantly lower interest rates have more than offset the additional rate impact caused by changes in the energy market.
“We support the Taylorville project because the legislation contains strong consumer protections and ensures that Tenaska will live up to its pledge to sequester more than 50% of its carbon emissions”
Last month, the STOP Coalition released an Exelon-funded study claiming that rate impact for the project had gone up by over $100 million annually (40%) because of lower power and natural gas prices. Because Tenaska believed the study was deeply flawed and took neither accelerating coal plant closures nor lower interest rates into account, the company asked Pace Global (author of the original rate impact study from the 2010 Facility Cost Report vetted by the Illinois Commerce Commission) to update its study, replacing the 2010 commodity price forecasts with the most recent US Energy Information Administration forecasts.
The Pace analysis found that over 30 years, interest rate reductions alone will save Illinois ratepayers $882 million, more than offsetting other rate impacts from energy market changes.
|Changed Input||Source||Annual Rate Impact Effect|
|Lower natural gas and power prices||EIA||ADD $24,000,000|
|Lower interest rates||Bloomberg||SUBTRACT $29,400,000|
|Net change since Facility Cost Report||Pace||SUBTRACT $5,400,000|
“Simply put, our opponents seem to have trouble with basic math. Not only has the sky not fallen on the Taylorville project, but it has become even brighter,” said Tenaska Vice President Bart Ford. “Because Exelon stands to lose as much as $100 million annually in windfall nuclear profits if Taylorville is built, it is not surprising that it commissioned these results.”
In addition to interest rates, the most significant beneficial change is the accelerated announcements of coal plant closures. Ford continued, “With more than 319 announced coal unit closures totaling nearly 43,000 megawatts, every day it becomes clearer that our plant closure predictions were accurate while our opponents’ dismissal of this issue as “merely speculation” was as phony and deliberately misleading as the latest Exelon ‘study.’”
SB 678 and the Taylorville Energy Center continue to earn the strong support of a broad coalition of labor, business, environmental and community interests including the state’s leading consumer advocates Attorney General Lisa Madigan and the Citizens Utility Board.
“We support the Taylorville project because the legislation contains strong consumer protections and ensures that Tenaska will live up to its pledge to sequester more than 50% of its carbon emissions,” said Paul Gaynor, Chief of the Public Interest Division for Attorney General Madigan.
“This legislation protects residential ratepayers and helps offset the problem of coal plant retirements and that’s why we support it,” said Bryan McDaniel, CUB senior policy analyst and legislative liaison.
In addition to the rate cap for all residential customers, legislative changes in recent years have ensured that at least 2/3 of any capital cost overruns and 2/3 of any carbon sequestration cost overruns will be paid for by the project’s owners and not by ratepayers. This benefits not only residential customers, but government and commercial customers as well.
“This is simple supply and demand. Unless we reduce demand and increase supply, prices will rise. SB 678, the Comprehensive Energy Efficiency and Investment Act, accomplishes both of these goals,” concluded Bart Ford.
Tenaska is one of the largest independent power producers in the United States. Forbes magazine ranks Tenaska 25th among the largest privately-held U.S. companies, based on 2010 revenues. Tenaska has developed approximately 9,000 megawatts (MW) of electric generating capacity across the United States. Tenaska affiliates currently operate and manage eight power plants totaling more than 6,700 MW that it owns in partnership with other companies. Tenaska is headquartered in Omaha, Nebraska, with offices in Dallas, Texas; Denver, Colorado; Pittsburgh, Pennsylvania, and Calgary, Alberta, Canada. Tenaska affiliates also market natural gas, electric power and biofuels, with Tenaska’s natural gas marketing affiliate rated as one of the top 10 natural gas marketers in North America. Tenaska affiliates are also involved in private equity investment and acquisition management, fuel supply, natural gas exploration, production and pipeline systems and electric transmission development. For more information about Tenaska or the Taylorville Energy Center, visit www.tenaska.com or www.cleancoalillinois.com.