Ameren cites EPA rules in closure of two Ill. plants

ST. LOUIS -- Ameren Corp. said Tuesday it will close two power plants in Illinois by the end of the year, blaming the cost of complying with new pollution rules issued by the Environmental Protection Agency.

The St. Louis-based utility will shut down plants in Meredosia and Hutsonville. Ninety jobs will be eliminated, though Ameren said it is seeking other places where the 22 management and 68 union workers can be reassigned.

In July, EPA issued the Cross-State Air Pollution Rule that requires reductions in sulfur dioxide by 73 percent and nitrogen oxide by 54 percent from 2005 levels. Ameren said other more restrictive regulations on coal-fired generating plants are expected in the coming months and years.

"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," said Steven Sullivan, president and chief executive officer of Ameren Energy Resources Co., the holding company of Ameren. "We regret the impact this will have on our employees and the communities where these plants have been important to the local economies."

Coal-burning power plants are the leading source of carbon dioxide emissions that experts blame for global warming.

The two plants provided about 4 percent of Ameren Energy Resources' total generation over the past two years, the company said. Ameren serves about 2.4 million electric customers in Missouri and Illinois, along with about 1 million natural gas customers in the two states. Ameren said customers will see no impact from the closures.

The plant in Meredosia is also a proposed site that would have provided electrical generation as part of a scaled-down version of the FutureGen project. FutureGen calls for an experimental plant that would burn coal for power but store emissions of carbon dioxide underground. The project is backed by a consortium of big energy and utility companies.

Former president George W. Bush first announced plans for FutureGen in 2003. The proposal has faced a variety of setbacks, resulting in a revised plan known as FutureGen 2.0.

"Ceasing current operations at Meredosia has no impact on the viability of FutureGen 2.0," Sullivan said. "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."

Ameren also cited a lack of a multiyear capacity market managed by the Midwest Independent Transmission System Operator as a factor in closing the plants.

"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," Sullivan said.

Ameren expects the closures to result in a charge to third-quarter earnings. The company also expects to incur other costs related to employee severance and the plant closures, though those costs have not yet been determined.