Under the revised "Power Block First" proposal for the 611 MW Taylorville Energy Center (TEC) in Illinois, electricity customers in the state could save an estimated $437.7 million over a 20-year period, including more than $250.6 million in the plant's first five years of operation, according to a rate impact analysis conducted by Pace Global LLC, a Siemens (NYSE: SI) business.
As TEC's power capacity is bid into the PJM auction in future years, hundreds of millions in additional savings for ComEd customers could also be realized because of lower resulting auction prices. PJM holds an annual auction for generating capacity contracts that begin three years into the future.
Using U.S. Energy Information Administration (EIA) forecasts of natural gas and power prices, and electricity demand growth, Pace Global found that adding TEC's power into the Illinois energy markets would reduce average electricity bills by $21.9 million per year over the first 20 years of the project. During the plant's first five years of operation, customers can expect $50.1 million in average annual savings.
The revised “Power Block First” proposal would authorize construction of the initial stage of TEC. The first phase of the project would equip a combined-cycle natural gas-fired power plant that would be equipped to accept substitute natural gas (SNG) from a potential future coal gasification unit. Should market conditions improve and the plant meets the General Assembly’s approval, the second phase of the plant would incorporate the coal gasification unit along a with carbon capture and storage system.
"The 'Power Block First' plan allows Illinois to take advantage of today's low natural gas prices to build a necessary new source of electric power resulting in lower overall rates," said Tenaska Vice President Bart Ford. "In the future, when economics favor the use of Illinois coal, equipment can be added to convert coal to clean SNG, capture carbon dioxide and provide for geologic storage."
The new plan also allows Tenaska to preserve the air permit and interconnection position for the initial natural gas-fired power plant. The ability to proceed with the SNG portion of the plant is preserved as a hedge against the possibility of increasing gas prices.
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