trending Market Intelligence /marketintelligence/en/news-insights/trending/VEfqsrjPUtQsRxgtaOv7LA2 content esgSubNav
In This List

Illinois lawmakers push coal incentives in new state bill


Insight Weekly: Sustainable bonds face hurdles; bad loans among landlords; AI investments up


Insight Weekly: Bank oversight steps up; auto insurers’ dismal year; VC investment slumps


Insight Weekly: Renewables lead capacity additions; bank mergers of equals up; nickel IPOs surge


Insight Weekly: Utilities face headwinds; S&P 500 dividend hikes likely; dollar poised for rally

Illinois lawmakers push coal incentives in new state bill

Illinois legislators are trying to boost local coalproduction through new state legislation.

Rep. John Bradley, D-Marion, introduced the Illinois Energyand Environmental Security Act May 10 in the Illinois General Assembly in an effortto revive the state's coal industry and create more jobs.

"Illinois coal has been such an important part of ourstate's past success, and I believe it can be key to our state's future growthif we can embrace new technologies," Bradley said in a release. "Byasking the [Illinois Commerce Commission] to help us find a way to pay for thescrubbing technology, we will be able to breathe new life into this industryand create and support so many jobs and families downstate. Our state has atremendous opportunity now to shape how we provide our residents and businessesthe clean power we need, and coal is a critical part of the discussion."

The proposed bill would require state utilities to buy atleast 40% of their retail from clean-coal burning facilities from 2020 onwards.It would also authorize the Illinois Commerce Commission to find a way to payfor scrubbers to allow for cleaner coal plants and would give the state theability to buy and sell Illinois coal to generating facilities.

Some say legislatorsmight not support bill

Phil Gonet, the president of the Illinois Coal Association,says that the trade organization supports the concept of the bill, but believesthe biggest challenges for passing it comes in the details.

For years, Illinois coal producers were forced to ship muchof their product out of state since local power plants began opting for PowderRiver Basin coal, Gonet told S&P Global Market Intelligence. Coal fromWyoming was cheaper despite high transportation costs and would allow plants tomeet standards set forth in the Clean Air Act of 1990 without having to installan expensive scrubber. Producers had to ship their coal to out-of-state powerplants which had installed the wet scrubbers necessary for Illinois coal, Gonetexplained.

Now, under more stringent rules set forth by the Mercury andAir Toxics Standards established by the U.S. EPA, coal plants are installingscrubbers even for PRB coal.

The problem, Gonet says, is that PRB coal requires a dryscrubber which will not work for coal from Illinois. Some Illinois plants havealready installed dry scrubbers while others have yet to install any, and Gonetsays that Bradley's bill is part of a drive to incentivize these companies toinstall wet scrubbers suitable for local coal.

But Gonet says the law may face a problem from federalinterstate commerce laws, which would take issue with state incentives thatspecifically target Illinois coal. "Theinterstate commerce is a huge hurdle. I don't know of any instances where thishas been overcome."

Another problem is the looming state election. Illinoislawmakers are currently in a budget impasse, and leading up to the Novembervote Gonet believes that politicians won't have the stomach for a law thatcould lead to increased utility rates, if passed.

"In my discussions with legislators, there isn't anappetite to tackle this," he said.

Regardless, Bradley says that the bill represented a push toinject coal into the debate over energy policy.

The proposed bill receives bipartisan support through Rep.Avery Bourne, R-Raymond; Rep. C.D. Davidsmeyer, R-Jacksonville; and Sen. AndyManar, D-Bunker Hill, according to TheState Journal-Register.