Decision Nears On Rauner Plan For Easing Coal Plant Pollution Limits
A decision is expected Thursday on Gov. Bruce Rauner’s move to prop up the coal power industry in Illinois by easing clean-air rules, a change critics say is an unneeded benefit to a large energy company that will lead to more pollution-related deaths and sickness.
The Illinois Pollution Control Board, a state rule-making panel, is expected to decide whether to end current clean-air requirements for eight downstate coal-fired power plants.
Existing rules dictate that owner Dynegy run its cleanest coal plants — those with the best pollution controls — to balance toxins emitted by its dirtiest plants. The board is being asked by the Rauner administration to replace that rule with one that imposes an annual cap on total emissions opponents say will allow greater amounts of toxins to be released into the air.
It’s a plan being driven by economics — coal power plants have a hard time competing with other sources of energy in Illinois, said Gerald Keenan, a former board member and past chairman of the pollution board.
Cheap natural gas power generators and government-subsidized nuclear, wind and solar energy have an advantage in markets such as Illinois where power sources compete with each other.
“The thing that has changed is the situation in power markets,” Keenan said. “Now coal plants have been closing because they are not economic.”
The problem with the Rauner plan, according to health and environmental groups and Illinois Attorney General Lisa Madigan, is that it would allow the dirtiest plants to operate more frequently. They also criticize what they call the high caps proposed by Rauner’s Illinois Environmental Protection Agency that they say could allow for a doubling of what is already tens of thousands of tons of harmful sulfur dioxide and nitrogen oxide emissions released into the air every year.
All but one of the pollution panel’s five members were appointed to the board by Rauner. If it sides with the governor, the new coal plan still has one more regulatory hurdle to cross before it can go into effect — approval from a bipartisan panel of House and Senate lawmakers.
The pollution board action is coming at the same time President Donald Trump’s environmental regulators are attempting to scale back pollution rules on coal-burning plants across the country. According to the White House’s own analysis, the Trump plan will lead to hundreds of more deaths and thousands of additional cases of sickness due to polluted air every year.
The decision on Rauner’s plan also coincides with the end of a tough re-election campaign for the incumbent Republican in which support from voters in Central and Southern Illinois served by the plants and the coal industry could prove pivotal. In recent weeks, several downstate lawmakers have written the pollution board urging it to make a decision.
Dynegy, bought this year for more than $2 billion by Texas-based Vistra Energy, began lobbying Rauner’s EPA in late 2016 to change the rules, pollution board documents show. Other documents, submitted to the board, show Illinois EPA Director Alec Messina and his staff were in contact with Dynegy last year to draft the rule change.
In Illinois, Dynegy argued the rule changes are needed to keep it competitive with energy rivals. Prior to joining Rauner’s cabinet, Messina was a registered lobbyist for a trade group that includes Dynegy as a member.
Messina, who often talks about the regulator’s duty of striking a “balance” between economic and environmental concerns, said he’s not favoring the power company.
“As a regulator you have to be open to rules that make sense,” Messina said in an interview.
Messina argues the proposed rule change will reduce pollution because technically the eight plants could now emit more toxins in the air under the current rule. Madigan and advocacy groups disagree, saying all the plants would have to be operating 100 percent of the time to produce such a high amount of pollution. In reality, that’s not been the case, Messina’s critics say.
“You’re jeopardizing the health and environment in Illinois to provide Vistra additional returns to shareholders that they don’t need,” said Justin Vickers, a lawyer for the Chicago-based Environmental Law and Policy Center.
The environmental group claims Dynegy’s fleet of coal plants are turning a profit under current rules, though the company says they are money losers. Vickers contends Dynegy’s argument is further undercut by the Vistra buyout, with the combined energy firms boasting a stock market value of more than $13 billion.
“They did not demonstrate either before or after the merger with Vistra the change in rule is necessary,” Vickers added.
Critics also see Dynegy’s push for the rule change as a veiled threat to shut down some operations without incentives from the government.
There are parallels between Dynegy’s move and that of nuclear power giant Exelon, which in 2016 obtained a bailout from Rauner and state lawmakers after threatening to close two of its six plants in the state.
Like Exelon, Dynegy is pointing to competitive pressures in the market for selling power. Both the nuclear and coal industries have been hurt by competition from cheap natural gas power and so-called renewable energy sources like wind and solar.
“There is no benefit to the public,” said James Gignac, a former lawyer for Madigan who is now an analyst for the Union of Concerned Scientists in Chicago. “Communities are getting played by multibillion-dollar corporations. Environmental groups picked apart the logic and the need to do this.”
The attorney general and the advocacy groups say the change in regulation would allow Dynegy to permanently shut down its two least-polluting plants, Coffeen and Duck Creek in southern and central Illinois.
They are more expensive for the company to operate than other Illinois plants that emit more air pollutants, which health and environmental groups contend can lead to more illnesses and deaths.
Under the proposed new state rules, critics allege, Dynegy would also be allowed to operate its dirtier plants for longer periods than now.
Lawyers for Dynegy acknowledge cleaner plants cost more to run. Under current rules, lower emission plants such as Coffeen and Duck Creek have to run “in order to offset emissions from units with relatively higher emissions rates,” company lawyers said in a board filing in June.
A recent analysis of the Illinois plan by the Union of Concerned Scientists estimates that the number of premature deaths, heart attacks, asthma attacks and emergency room visits due to asthma will all increase in Illinois and even beyond state lines due to the potential increased pollution from dirty plants.
A spokeswoman for the pollution board, which writes rules for environmental laws and decides contested regulations, said board members cannot talk about cases before they are decided. Rauner has appointed four of the five members.
So far, the company is mum on its plans for whether it will close or maintain its coal plants regardless of the regulatory break. Dynegy previously wrote off the value of its cleaner-burning Coffeen plant because of the cost to run it.
“We just assumed control of these assets a few months ago,” a Vistra Energy spokeswoman said in an email. “We are reviewing their performance and ways to make them more efficient and cost effective. After we complete our assessment, we’ll look closely at the results and see what options there are.”
Environmental reporting at the BGA is supported by Joel M. Friedman, President of The Alvin H. Baum Family Fund.