Prairie State Coal Plant
At $9 billion, Prairie State threatens the electric rates of millions of electric customers - including many Hoosiers.
Millions of Midwest electric customers, including customers of municipally-owned electric companies all over Indiana, are being threatened with high electric bills due to the cost overruns and economic risks of a new coal-fired power plant under construction in Southern Illinois.
Peabody Energy, the largest coal company in the world, developed the 1600 megawatt Prairie State coal plant project nearly a decade ago. A few years later, Peabody sold 95% of the project, including a coal mine and disposal sites, to municipal electric systems. The communities were promised a lowrisk, steady source of electric power at below market rates.
Now, 2.5 million ratepayers in 217 communities across 9 states are on the hook for paying for this plant for decades to come. All told, between construction and debt financing costs, the Prairie State plant will cost $9 billion.
During the years that the Prairie State plant was being proposed and under construction, 166 other proposed coal-fired power plants across the country were canceled because they were too expensive. Peabody decided they didn’t want to take the risks for Prairie State and managed to sell 95% of the project - and the risk - to municipalities. A nearly identical plant to Prairie State in Kentucky was scrapped, and American Municipal Power (AMP), one of the main owners of Prairie State, canceled their own proposed coal plant in Southeast Ohio.
When they bought into the plant, communities were told that the power would cost about $40 - $45 per megawatt hour and would be below the market price of power for the lifetime of the plant. However, because construction costs are more than $1 billion over budget, the price of the power is now scheduled to begin in the high $50 range. At the same time, the market price of power has dipped significantly, to approximately $30 per megawatt hour. The plant is months behind schedule in going online, and municipalities are already paying the costs of interest on the bonds - before any electricity is ever created. In this economy, we cannot afford to waste our money like this!
When they bought into the Prairie State plant, public power entities also took on the all of the environmental risks of the project. The plant will be a major new source of air pollution, releasing a combined 36 million pounds of sulfur dioxide, nitrogen oxide, soot, and mercury each year.
The Prairie State project also includes a coal mine, a mine waste disposal site, and a coal ash disposal site. The mine has received numerous citations for safety hazards from the federal government, and it remains unknown whether the mine will be able to produce the full supply of coal needed to meet the project’s demands safely over the next 30 years.
The Prairie State Energy Campus is also projected to produce 3.6 million to 4.8 million tons of toxic ash, which must be disposed. Prairie State bought two coal ash waste disposal sites from Peabody and now PSEC is proposing to build a third site near the plant, which would destroy 740 acres of farmland.