CMS Energy, Peabody Team on Coal Plant

CMS Energy, Peabody Team on Coal Plant

Michigan-based utility holding company CMS Energy Corp. is teaming up with coal company Peabody Energy Corp. in developing a $2.5 billion, 1,600-megawatt power plant and a nearby coal mine in southern Illinois, both companies announced Wednesday.

Under terms of the deal, CMS Enterprises, a CMS Energy subsidiary, and St. Louis-based Peabody — the world’s largest private coal company — each will own 15 percent of the so-called Prairie State Energy Campus project through a shared limited liability company. Other stakes will be held by various Midwest utilities and cooperatives.

CMS Enterprises said it will be the project’s lead developer, construction chief and operator of the power plant, expected to generate enough power to serve one million people.

Prairie State has all major permits necessary to begin construction, though no groundbreaking has yet been set at the site in Illinois’ Washington County, southeast of St. Louis. Peabody has said construction would take about four years.

Peabody said it continues to complete engineering plans and still must line up financing. More than half of the plant’s output from its dual 800-megawatt units has been spoken for by a consortium of six Midwest utilities, CMS Enterprises said.

“Selecting CMS Enterprises as operator marks significant progress in our development process, allowing Prairie State to move forward with a recognized leader to deliver clean, low-cost energy for the region,” said Rick Bowen, Peabody’s president of generation and Btu conversion.

CMS said it expects to invest $200 million in the project when then plant is built.

The Sierra Club and other environmental and public health groups have argued that the plant would release high levels of sulfur dioxide, mercury and other pollutants into the air and harm visibility in southeast Missouri’s Mingo National Wildlife Refuge.

Peabody spokeswoman Beth Sutton said the new plant will have advanced pollution controls, including scrubbers that will remove 99.9 percent of fine particles and 98 percent of sulfur dioxide; Bruce Nilles of the Sierra Club’s Midwest Clean Energy Campaign has countered that the project would only worsen existing pollution.

Peabody has said the proposed plant would be fueled by six million tons of coal expected from a new Lively Grove Mine nearby.

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