Ameren Energy Resources (AER) Co. on Tuesday announced it would shutter its coal- and oil-fired Meredosia and Hutsonville energy centers in Illinois by 2011, citing concerns about rising costs related to the compliance of the Environmental Protection Agency’s (EPA’s) Cross-State Air Pollution Rule (CSAPR).

The two facilities provided approximately 4% of AER’s total generation over the last two years and a lower percentage of margin, the holding company for the merchant generation business of Ameren Corp. said. CSAPR, finalized by the EPA this July, requires reductions in sulfur dioxide emissions by 73% and nitrogen oxide by 54% from 2005 levels. However, “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,” Ameren said.

“CSAPR tightens the restrictions on SO2 and NOx emissions to the point that we cannot continue to economically operate these units," said AER President and CEO Steven R. 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."

Another factor driving the closure of operations at two facilities is “a lack of a multi-year capacity market managed by the Midwest Independent Transmission System Operator (MISO),” Ameren said.

"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.”

Ameren’s Hutsonville Energy Center has two coal-fired units with a net generating capacity of 151 MW. The 369-MW Meredosia Energy Center, which includes one 203-MW coal-fired unit and a 166-MW oil-fired unit, is the proposed site for the Department of Energy’s revamped FutureGen project. The DOE had a year ago announced it would award $1 billion in Recovery Act funds to the so-called FutureGen 2.0 project, which plans to repower the Meredosia coal-fired unit using oxyfuel technology.

The viability of the proposed full-scale oxy-combustion plant for capture and storage of carbon dioxide would not be affected by closure of current operations at Meredosia, Ameren said in a statement. “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," said Sullivan.

The company has so far submitted detailed design and project cost estimates for the project to the DOE, reported the Jacksonville Journal Courier. The DOE is expected to act on the review by Nov. 30.

Sources: POWERnews, Ameren Corp., Jacksonville Journal Courier