Coal, New Projects

Dynegy Will Shutter 30 Percent of Southern Illinois’ Generation Capacity

Dynegy, one of the nation’s largest independent power producers, said Tuesday it plans to shut down about 30 percent of Southern Illinois’ power generation capacity, citing a failure to recover basic operating costs in the latest Midcontinent Independent System Operator (MISO) capacity auction.

Over the next year, the company will shut down several coal-fired units, including Units 1 and 3 at the Baldwin Power Station and Unit 2 at the Newton Power Station. Earlier this year, Dynegy announced plans to retire the 465-MW Wood River Power Station in June because it was no longer cost effective to operate the coal-fired plant. Altogether, Dynegy said it will shut down 2,800 MW of coal-fired generation, which amounts to 30 percent of the power generation capacity in Southern Illinois.

Most of the company’s 13 Illinois power plants are downstate, serving more than 800,000 retail customers and employing 1,400 people.

Dynegy has asked MISO to remove 1,835 MW from MISO Zone 4.

Dynegy CEO Robert Flexon said low wholesale power prices coupled with MISO’s market design prevents power producers in Zone 4 from receiving sufficient compensation to cover generating costs.

“This is a losing model that exports southern and central Illinois jobs and economic base to the surrounding states resulting in a catastrophic economic outcome for downstate Illinois,” Flexon said in a release.

Generation units in Zone 4, Flexon said, are “wrongly grouped with out-of-state utilities rather than the competitive power producers in northern Illinois and PJM. This must change.”  

Flexon called on state officials to take immediate action, adding it’s not too late to prevent the plants from closing and preserve those jobs.

“We are ready to work quickly with MISO, the state of Illinois, union leadership, and all stakeholders to rectify the situation and preserve the jobs and economic base in downstate Illinois,” he said.