Exelon: FutureGen alliance has pulled plug on FutureGen 2.0 coal project

Exelon said in its Feb. 10 annual Form 10-K report that the FutureGen Industrial Alliance has recently ceased efforts to continue developing the coal-fired FutureGen 2.0 power project in Illinois.

The project, under orders of the Illinois Commerce Commission, would potentially supply power to Commonwealth Edison, an Exelon unit.

Said the Exelon Form 10-K: “During 2013, the ICC approved, and directed ComEd and Ameren (the Utilities) to enter into 20-year sourcing agreements with FutureGen Industrial Alliance (FutureGen), under which FutureGen will retrofit and repower an existing plant in Morgan County, Illinois to a 166 MW near zero emissions coal-fired generation plant, with an assumed commercial operation date in 2017.

“In February 2013, ComEd filed an appeal with the Illinois Appellate Court questioning the legality of requiring ComEd to procure power for retail customers purchasing electricity from competitive electric generation suppliers. On July 22, 2014, the Illinois Appellate Court issued its ruling re-affirming the ICC’s order requiring ComEd to enter into the sourcing agreement with FutureGen and allowing the use of a tariff to recover its costs.

“ComEd decided not to appeal the Illinois Appellate Court’s decision to the Illinois Supreme Court. However, the competitive electric generation suppliers and several large consumers petitioned for leave to appeal the Illinois Appellate Court’s decision. On November 26, 2014, the Illinois Supreme Court granted the petition.

“ComEd executed the sourcing agreement with FutureGen in accordance with the ICC’s order. In addition, ComEd filed a petition with the ICC seeking approval of the tariff allowing for the recovery of its costs associated with the FutureGen contract from all of its electric distribution customers, which was approved by the ICC on September 30, 2014.

“A significant portion of the cost of the development of FutureGen was being funded by the [U.S. Department of Energy] under the American Recovery and Reinvestment Act of 2009. In early February 2015, the DOE suspended funding for the project until further clarity could be obtained on certain significant hurdles facing the project, including the outcome of the litigation described above. Whether or not the DOE funding will be reinstated at some later date is unknown at this time.

“On January 13, 2016, FutureGen informed the Illinois Supreme Court that it had ceased all development efforts on the FutureGen project and would soon be seeking to terminate the FutureGen supply agreements. Accordingly, FutureGen requested that the court dismiss the proceeding as moot. A decision from the Illinois Supreme Court dismissing the matter is expected in early 2016. In February 2016, FutureGen terminated its sourcing agreement with ComEd. As a result, ComEd is under no further obligation under this agreement.”

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Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy's Coal Report. He was formerly with Coal Outlook for 15 years as the publication's editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor's degree from Central Michigan University.

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