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Dynegy granted approval to buy coal plants

World Coal,

Last week, the Illinois Pollution Control Board granted a variance to Illinois Power Holdings (IPH), a Dynegy subsidiary and Ameren Energy for a temporary relief from the sulfur dioxide section of the Illinois’ Multi-Pollutant Standard air emissions rule. The variance clears the way for Dynegy to buy five merchant coal plants from Ameren, representing a total of 4119 MW.

The transaction will double Dynegy’s operations in Illinois. The company expects to complete the transaction by the end of the year. However, at least a portion of one of those plants, the Edwards station near Bartonville, could be retired under the board's decision. The board also ordered Dynegy to continue to burn low sulfur coal at the Joppa, Newton and Edwards plants, which are not scrubbed to reduce sulfur dioxide emissions, until the end of 2019.

Dynegy must also operate existing scrubbers to lower SO2 emissions at Duck Creek and Coffeen by at least 98% on an annual basis.

The variance granted to Dynegy offers a net benefit to air quality over the life of the variance, which is greater than the environmental benefit under Ameren’s original variance. The company plans to complete the scrubber at Newton by the end of the variance period. It also expects to make substantial investments in the facilities to meet other anticipated environmental regulations.

The board's decision "clears the way for Ameren to divest of our merchant generation business and focus exclusively on growing and strengthening our rate-regulated electric, natural gas and transmission operations," explained Thomas Voss, CEO of Ameren.

Edited from various sources by Katie Woodward

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