Photo by Diane Cox
Dynegy, located on Illinois 143 in East Alton near the Wood River Creek, announced plans to retire its 465-megawatt Wood River power station in mid-2016.
Dynegy Inc., located on Illinois 143 in East Alton near the Wood River Creek, has announced plans to retire its 465-megawatt Wood River Power Station in mid-2016.
The station includes two coal-fueled units that began operating in 1954 and 1964 and employs 90 workers.
In a press release, Dynegy states the closure is necessary because a poorly designed wholesale capacity market in Central and Southern Illinois does not allow competitive generators to recover costs.
“I’m not sure how this process is going to play out,” East Alton Mayor Joe Silkwood said. “I think there are still some things that have to happen before the plant can officially close. It’s my understanding that they are basing their decision on the profitability. I don’t know if there is a chance that it can be saved; I certainly hope it can be saved. In any town, 90 jobs are very important and those 90 families will have a major impact. This closure will also have an impact on the surrounding area. One of the major concerns is potential tax dollars that will be lost, not only in our town, but in the surrounding area.”
The village of East Alton and the East Alton Library will lose $340,826 in tax revenue. The city of Wood River will lose $133,197 between the township, levee and drainage, and the road and bridge funds. St. Louis Regional Airport will be out $12,938 and Lewis and Clark Community College will lose $104,961. Madison County will not be able to count on $40,755 and the Alton School District will suffer a loss of $755,211. The total impact of tax revenue lost amounts to $1,485,667.
The company states the current market design of the Midcontinent Independent System Operator Inc. (MISO) capacity auction is flawed because it allows regulated utilities from surrounding states to bid their capacity into the auction at little or no cost. These regulated utilities receive higher guaranteed compensation from their respective state-regulated markets. Central and Southern Illinois market participants operate in a deregulated state and must rely on the MISO capacity auction for fair compensation.
“Illinois is surrounded by 14 states that are regulated and therefore can be compensated for a lot of their generative costs by their state,” Dynegy spokesperson Micah Hirschfield said. “We are committed to work with MISO to regulate the market. We’re having a lot of discussions with MISO on many topics. Dynegy cannot financially survive in a market where they are not refunded their costs by the state while surrounding companies that are can underbid.”
Dynegy expects to formally file a retirement notice with MISO by Dec. 1. The plant closure will trigger a reliability review with MISO to determine if the plant is needed for reliability. If MISO determines the plant is not needed, Dynegy expects the closure to take place in mid-2016. MISO will have 75 to 180 days to make its determination.
“I didn’t know about the closure until this press release was issued,” Silkwood said. “I wish I would have been notified sooner. I did contact Dynegy and I offered to help in any way I could. I also offered to contact our senator to see if something could be done through his office. They told me that at this point they didn’t feel much of anything could be done.”
Dynegy officials say they hope this step will keep lines of communication open with MISO to bring about regulation changes to give the plant an opportunity to operate and become more profitable.
“Dynegy is committed to working with MISO, the state of Illinois, union leadership and all stakeholders to redesign the MISO capacity market to one that properly functions and fairly compensates competitive generators,” Dynegy President and CEO Robert C. Flexon said. “Otherwise, all generating plants in the MISO portion of Illinois will face a future of financial challenge.”
Dynegy plans to minimize the impact on the approximately 90 employees in Wood River and to terminate operations in a safe and environmentally responsible manner.
“I would like to thank the men and women who have proudly and professionally served and safely operated the Wood River facility for decades,” Flexon said. “Wood River has been an important part of the local community for many years, providing safe, reliable and cost-effective power while also being a responsible corporate citizen.”
Dynegy is capable of supplying 21 million homes with energy. Homefield Energy and Dynegy Energy Services are retail electricity providers serving businesses and residents in Illinois, Ohio and Pennsylvania.
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