After decades on line, the award-winning Hutsonville power plant will power down for good later this year.
Ameren Energy Resources Company LLC, the holding company for the merchant generation business of Ameren Corporation, announced today the Hutsonville and Meredosia energy-generating plants will cease operating by the end of the year.
The shutdown of these facilities will result in the elimination of 90 at the two plants. This includes eight management and 29 union-represented employees at Hutsonville and 14 management and 39 union employees at Meredosia. AER will be offering a range of severance benefits for those employees for whom other opportunities or reassignments are not found.
"We are working to provide alternative employment opportunities and reassignments within AER for many of the 22 management and 68 union-represented employees affected by these decisions," said AER President and Chief Executive Officer Steven R. Sullivan. "It is my sincere hope that any employee desiring a reassignment opportunity can be accommodated. We will work hard to achieve this objective."
Ameren spokesperson Susan Gallagher could not speculate on what will happen to the Hutsonville Power Station after it is closed. The plant has been for sale in the past and there is no word on whether the company will tear down the plant in the future if it is no longer in use.
Both energy centers are part of Ameren Energy Generating Company, a subsidiary of AER. The net generating capacity of Meredosia Energy Center is 369 megawatts-including one 203-megawatt, coal-fired unit and one 166-megawatt, oil-fired unit. The Hutsonville Energy Center has two coal-fired units with a net generating capacity of 151 megawatts.
The Hutsonville plant came on line in 1940, generating 31 megawatts with a single unit. In 2009, the Powder River Basin Coal Users' Group recognized the plant as one of two PRB Coal Plants of the Year for their innovation and implementation of "best practices and best available technologies." The plant was inducted into the Power Plant Hall of Fame. The closure of these facilities is expected to result in a change to third quarter 2011 earnings. Ameren Energy Generating Company's net investment in the Hutsonville and Meredosia energy centers totaled $26 million and $1 million, respectively, as of June 30.
In addition, the company expects to incur other costs related to employee severance and the closure of these centers that are still being determined.
The two facilities provided about 4 percent of AER's total generation during the last two years and a lesser percentage of margin.
The closure of these units is primarily the result of the expected cost of complying with the Cross-State Air Pollution Rule issued in July by the U.S. Environmental Protection Agency. CSAPR requires reductions in sulfur dioxide by 73 percent and nitrogen oxide by 54 percent from 2005 levels. It is one of a number of regulations expected to require expensive environmental controls on coal-fired generating units across the nation in coming months and years.
"CSAPR tightens the restrictions on SO2 and NOx emissions to the point that we cannot continue to economically operate these units," said Sullivan. "Numerous options to bring these units into compliance were explored, including installing additional environmental controls, but the costs were just too high to be justified. We regret the impact this will have on our employees and the communities where these plants have been important to the local economies."
The Meredosia Energy Center is also the proposed site for the world's first, full-scale, oxy-combustion coal-fired plant for capture and storage of carbon dioxide. In 2010, AER announced a cooperative agreement with the U.S. Department of Energy that would provide funding for this project at Unit 4 at Meredosia. It is part of FutureGen 2.0, which calls for transporting the captured CO2 over a pipeline to an Illinois storage facility developed by others.
"Ceasing current operations at Meredosia has no impact on the viability of FutureGen 2.0," said Sullivan. "FutureGen is still several years from needing a generating unit to test clean coal technology. We are currently in discussions with the FutureGen Alliance to determine how Meredosia Unit 4 could best be used for this project."
Another factor driving the closure of operations at these facilities is a lack of a multi-year capacity market managed by the Midwest Independent Transmission System Operator.
"Without the ability to sell capacity several years out, we cannot afford to make the substantial investment for environmental controls that would be required to keep these units in service," said Sullivan. "I suspect that MISO's proposed capacity construct, recently filed with the Federal Energy Regulatory Commission, will lead to the closure of additional non-AER merchant plants in the Midwest over the next few years unless the proposal is significantly modified.
"The Meredosia and Hutsonville energy centers have been venerable plants that have served the state of Illinois well over a number of decades," he added. "While we will miss the plants as part of our fleet, our immediate focus is on the impact to our employees."
With assets of about $23 billion, Ameren serves 2.4 million electric customers and one million natural gas customers in a 64,000-square-mile area of Missouri and Illinois.
Ameren's merchant generating operations include AER's Ameren Energy Generating Company's and AER's coal-fired plants plus multiple natural gas-fired units and Ameren Energy Marketing, an energy marketing and trading operation.