The owner of economically challenged coal-fired power plants in Southern Illinois is supporting legislation that, if passed, would help transform those sites into facilities for utility-scale solar and energy storage projects.
The Texas-based company, Vistra Energy, acquired the region’s fleet of coal plants when it completed its purchase of Dynegy Inc. last year. It says the facilities are beset by tough economic and policy conditions, and favors a bill before the state legislature that would provide funding to phase them out of production and repurpose the sites, instead of just shutting them down abruptly.
But some environmental groups oppose the measure, characterizing it as a potential “$140 million a year coal bailout,” according to J.C. Kibbey, an Illinois clean energy advocate for the Natural Resources Defense Council in Chicago.
Regardless of what becomes of the legislation in Springfield, the electric grid in downstate Illinois — a longtime bastion of coal production — faces major shifts in how it generates power.
“We know that drastic changes are imminent,” said Meranda Cohn, Vistra’s director of media relations and corporate affairs.
The company says 75 percent of its generating capacity in the region “at risk of being shut down” according to Cohn. Amid that backdrop, Vistra argues that the Illinois Coal to Solar and Energy Storage Act provides a way to more “responsibly transition” for plant employees, local communities, and the state’s ambitious clean energy goals.
“What we’re trying to do is create a viable business in Illinois and the status quo does not present that,” said Cohn. “We think this gives us an opportunity to continue to operate in the state and at the same time help the state meet its goals.”
Vistra says the concept would beneficially “reuse the substantial transmission infrastructure and available land at existing coal-fueled power plants.” The company said it is still assessing which types of projects would be best suited for specific plant sites.
Vistra employs about 1,000 workers total across its eight Illinois coal plants, Cohn said. The proposal would rely on a combination of funding mechanisms, including renewable energy credits and state-awarded grants. “Transitionary assistance” would be capped at $140 million annually from 2020 through 2024, a five-year period during which given coal plants would remain in operation, with solar or energy storage joining the mix at each site in either 2021 or 2022. The legislation would allow the plants to retire if unforeseen capital expenditures of more than $10 million would be needed to satisfy environmental laws or regulations and keep them in operation.
The company estimates that “up to 2,000 construction jobs and support jobs” would directly be created through the process of repurposing its facilities.
Opponents, though, are critical of the plan. One key reason they mention is that the struggles of coal plants stem from market forces — a tide the public shouldn’t be asked to counteract out of their own pocket.
“The economics are changing and utilities are just making decisions accordingly,” said Kibbey. “We should look with a very critical eye at a plan that would keep a coal plant open longer.”
He lists a variety of concerns and counterpoints in response to Vistra’s arguments for the bill. For instance, the renewable energy credit payments the company would receive are about seven times the typical value, he said, and studies done by the NRDC and other organizations have shown that the region’s power grid would not face problems created by a widespread loss of coal power, as the company has suggested. To the contrary, the NRDC says that “cleaner power will save Illinoisans up to $14 billion,” thanks to lower energy costs drawn from cheaper sources elsewhere.
When it comes to ensuring a smooth transition for affected employees and communities, Kibbey says the measure has shortcomings, since it does not offer job training or address the question of property tax replacement for local communities. He said better approaches to issues like those are included in alternative policies such as the Clean Energy Jobs Act.
“It’s not just, ‘Let’s build solar on these sites,’ even though that’s great,” said Kibbey. “Let’s think more holistically about economic development in these communities.”
Cohn said that she was not aware of similar plans being pursued by utilities other than Vistra. She was not sure of what the company would do if the legislation were to falter, though she said it would face the prospect of retiring plants sooner, and without any commitment to offset their loss with any solar or energy storage.
“If the legislature doesn’t pass this, there’s going to be more uncertainty facing these plants and we’re likely to face some tough decisions,” she said.
Kibbey, meanwhile, does say it’s a promising sign that companies like Vistra are having this conversation at all.
“It is encouraging to see that even a fossil fuel company like Vistra is beginning to see the writing on the wall that coal is on the way out,” he said. “I think that’s a welcome change.”
While that change is driven by economics, he doesn’t think “we can completely sit back” and allow the transition away from coal power to be left to the market, alone.
“The science tells us that we need to do this incredibly rapidly,” he adds. “When you pair bold policy action with the shifting economics, I think that is a recipe to get where we need to go.”