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"For the past several
decades, we have been led to believe that it was not possible to use
Illinois coal and meet federal environmental standards," Blagojevich
said. "But thanks to new technology our coal can be burned without
harming the environment and, at the same time, we can get the coal
industry here in Illinois back on its feet and get thousands of
hardworking people back on the job."
The legislation,
House Bill 2866, which was sponsored by state Rep. Dan Reitz,
D-Steeleville, and promoted by the governor in his State of the
State address, would provide state backing to bonds for companies
that agree to use the funds to build new plants or convert existing
plants to use clean coal technology. Such backing is considered
critical to reducing interest costs, thereby helping companies
initiate construction or improvement projects that might otherwise
not be started.
Since the price tag
for a new plant is estimated at between $1.5 billion and $2 billion,
a lower interest rate means savings of millions of dollars and could
determine whether or not a project moves forward. Providing what are
called "moral obligation bonds" through the Illinois Development
Financing Authority, the state incurs no financial risk, but the
borrower benefits from the state's bond rating.
The legislation also
makes it easier and more attractive for new or out-of-state
companies to access $500 million in existing state grants that can
be used to build power plants that use Illinois coal. In years past,
this potential source of assistance has gone unused because the
funds could only be accessed once the plants were up and running.
The newly signed bill removes that obstacle and allows developers to
be eligible for the funds before construction begins. For companies
considering making a $1 billion-plus investment in the state, the
governor said that change makes an "enormous difference."
Blagojevich said the
legislation represents a new way of approaching the coal issue and
stands in contrast to previously held notions that economic and
environmental concerns were mutually exclusive.
"This plan allows
power plants to invest in the technology to use Illinois coal again,
and we can take that first, vital step towards revitalizing our
communities, putting people to work and getting the economy of
southern and central Illinois back in business," the governor said.
By persuading just
five businesses to take advantage of the incentives, the governor
estimated that 20,000 new jobs could be created. For every
1,500-megawatt coal burning plant, approximately 4,000 jobs would be
created, including positions in mining and construction, as well as
jobs based at the power plants and at other sites.
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The promise of the
legislation already has encouraged plans for a $1 billion coal plant
to be built in Will County on the grounds of the former Joliet
Arsenal. The power plant -- part of a more than 2,000-acre
industrial development in Elwood -- is to incorporate clean-coal
technology to reduce emissions and allow for the use of as much as
two million tons of Illinois coal per year. The plant is slated to
begin operation in 2006 and is expected to employ 80 workers and
create more than 200 coal mining jobs.
The state's coal
mining industry has suffered as stricter federal air standards have
forced many power companies to burn coal from western states rather
than coal mined in Illinois, which has higher sulfur content. Recent
advances in "clean coal" technology allow power companies to use
coal mined in Illinois and meet federal environmental standards.
Of the 24
coal-burning plants in Illinois, only three facilities -- Duck Creek
in Canton, Southern Illinois Power Co-op in Marion, and City Water,
Light and Power Co. in Springfield -- use Illinois coal and advanced
clean-coal technology to reduce pollutants.
During the past 25
years, Illinois' communities that could previously count on revenues
and economic activity associated with coal mining have suffered
tremendously. Since 1980, downstate communities have seen the number
of coal mining jobs drop from more than 18,000 to about 3,500 today.
Illinois ranks ninth in coal producing
states, mining more than 33 million tons each year, and more than $1
billion of Illinois is coal is sold each year -- 80 percent of which
is used to generate electricity.
[News release]  |
