Last year independent energy company Dynergy announced plans to shut down plants which produce 1835 megawatts of power in southern Illinois. However, these shutdowns may just be the beginning according to CEO Bob Flexon. Mr. Flexon stated Dynergy will need to decide by the end of the year whether it will fully exit the MISO Zone 4 wholesale power market in southern Illinois. The company has 5500 megawatts of generating capacity in this market.

The plants slated for closure are all coal fired and are having difficulty competing against nuclear plants that benefit from a subsidy passed into law by Illinois late last year.  Mr. Flexon states that more closures are inevitable unless the coal plants receive some form of support.

Power in southern Illinois is provided mainly by coal-fired plants and nuclear plants. Last year two nuclear plants owned by Exelon were granted a subsidy by the state legislature. Initially the legislation which granted a subsidy to the nuclear plants included a provision to provide subsidies for the coal plants as well, but those provisions were removed from the final version of the bill. The result of this political maneuvering may well be the end of coal generated power from Zone 4 in southern Illinois entirely.

Last year Dynergy made the decision to close several plants due to their inability to recover their basic operating cost after the latest MISO capacity auction. Mr. Flexcon stated that Dynergy’s inability to compete is entirely due to the nuclear subsidies which have given Exelon an unfair advantage. He further stated Exelon’s subsidized nuclear plants are suppressing capacity prices in MISO. In an effort to remove this advantage Dynergy and other generators have filed a lawsuit in federal district court challenging the legality of Illinois’ nuclear subsidy. The outcome of this lawsuit could dictate the future of coal power in southern Illinios.