Prairie State Caps Cost… at $4 Billion

 The developers of the Prairie State Energy Campus, located near Marissa, IL  have agreed to cap the costs of the project at $4 billion.

The project has more than doubled in cost to $4.4 billion since Peabody Energy decided to build the plant in 2001. Most of those cost are being paid by municipalities that invested in the project in hopes of keeping electricity rates low.

Without providing details of the new agreement, the management company in charge of overseeing the plant said it had brokered a new deal capping the construction budget at "approximately $4 billion." That amount does not include the project's total costs, including nearby coal reserves, mine development and transmission lines. Prairie State Generating Company, LLC and Bechtel Power Corporation finalized a revised engineering, procurement and construction (EPC) agreement that will provide a fixed price for the total cost of constructing the power plant at the Prairie State Energy Campus.

"This agreement will provide greater price stability and economic predictability, which will benefit Prairie State owners and the customers they serve," said Prairie State President and CEO Peter DeQuattro said in a press release. "The agreement supports our mission of delivering low-cost, reliable and environmentally responsible electricity."

Prairie State is scheduled to begin operations of its first unit in the fourth quarter of 2011 and its second unit in the third quarter of 2012. On an installed cost basis, Prairie State will produce energy at a cost lower than other fuel sources, such as integrated gasification combined cycle (IGCC), natural gas, nuclear or geothermal, the developers said in a statement.

"This remains a good investment for our owners and the customers they serve," DeQuattro said. "Equally important, the project will invest approximately $1 billion in 21st century technologies, making it among the cleanest power plants of its kind anywhere in the nation. Prairie State's carbon dioxide emissions will be approximately 15 percent lower than the typical U.S. coal plant."

"Today, with a more stable market for materials and equipment, and the project moving well toward completion, the revised agreement is a sound approach for Prairie State, Bechtel and,most importantly, the customers who will be served by the new plant," said Alasdair Cathcart, Bechtel Power Corporation Senior Vice President and President, Fossil Power.

The Prairie State Energy Campus in Washington County, Ill., is a 1,600 megawatt state-of-the-art power plant that will deliver electricity to more than 2.5 million customers through its public power owners. Beginning service in the 2011-2012 timeframe, it will provide base load power using a steady, reliable supply of coal from an adjacent underground mine.

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