New technologies remove a barrier to mining in the Illinois basin, boosting output and bucking the overall trend
Norman McCauley walks with his horses on his farm, which is adjacent to the Prairie State Generating Co. power plant near Marissa, Ill.
LIVELY GROVE, IL — “The new mining activity is causing some disruptions. From a 40-acre field behind his house, Norman McCauley can see and hear the hum of the Prairie State Generating Co. power plant, with its nearly 700-foot-high smokestack and conveyor belts that deliver coal from the adjacent Lively Grove mine, which started producing coal in 2011.
‘It’s ruined this area,’ said Mr. McCauley, 54 years old, who farms beans, wheat and corn. He said he had hoped to buy up surrounding farmland from elderly residents, but instead many of them have sold to companies that developed the project. Other local residents say traffic has disrupted the rural landscape of green wheat fields.
David A. Meyer, chairman of the county board of Washington County, said Peabody Energy, the coal company involved in the project, had tried to mitigate disruptions, and he said the project has given the area a needed boost. ‘These are permanent good-paying jobs, some of them very high-tech,’ he said.”
— Kris Maher, Wall Street Journal
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COLUMBUS, OH — “The report stated that a $900 million cost overrun to build the plant helped balloon prices well above the market rate for electricity. Contracts signed by American Municipal Power, a co-op representing cities in six states, and other utility companies also had exposed 82 municipalities to debt costs for the plant before it was even operational.
Wade said Galion had no business speculating on energy prices.
‘In hindsight, it is clear that municipal utilities should not be involved in risky energy speculation,’ she said. ‘Private investors can certainly make the decision to invest in energy speculation, but it is just not appropriate to gamble with the public’s money.’
The plant’s adjoining coal mine was supposed to cut transportation costs, but IEEFA’s report claims the mine will not have 30 years’ worth of coal to supply Prairie State. Once the mine is closed, municipalities could be on the hook for eight years of debt service on the coal reserves, as well as the cost of a new coal source.”
— Jon Cassidy and Carten Cordell, Ohio Watchdog.org
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The Federal Mine Safety and Health Review Commission issued findings on May 21, 2010 affirming citations for the Lively Grove Mine operated by the Prairie State Generating Company. Peabody Energy Company sold 95% of the ownership of the mine to Prairie State.
The findings summarize the case this way: “The dispute in this case centers on whether 40-foot cuts and extra wide entries, without previous testing or evaluation, are a suitable part of the ventilation and roof control plans, given the conditions at the mine.”
The document goes on to conclude that Prairie State Generating Corporation’s objections to two citations, involving roof and ventilation control plans, are overruled.
Some utilities passing along costs of tighter environmental regulations
MARISSA, IL — “The Prairie State Energy Campus — an hour’s drive from St. Louis, with a smokestack 70 feet taller than that city’s famous Gateway Arch — likely wouldn’t exist had its developers not locked in long-term contracts that pass on construction costs to consumers.
…At Prairie State, a cold rain evaporates to mist above a sky-high mountain of coal. The fuel is moved here along belts and chutes from the mine across the road. The coal deposit took 1 million years to form, but Prairie State’s owners expect to consume it within 30 years.
The coal to fuel Prairie State is extremely high in sulfur, which means it requires more cleaning to remove toxic pollutants. And that adds substantially to costs.
To build Prairie State, Peabody Energy, the world’s largest private-sector coal company, partnered with eight public power agencies that are bearing 95 percent of the project’s cost through their customers: suburbs and municipalities who purchase electricity for their residents. Of those nine owners, three are Illinois-based municipal electricity cooperatives that purchase wholesale electricity on behalf of residents in municipalities across the state.”
— Julie Wernau, Chicago Tribune
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