CHICAGO (AP) — Gov. Pat Quinn vetoed legislation Friday that would have obligated Illinois utilities to buy synthetic natural gas from a proposed coal-to-gas plant on Chicago's Southeast Side for 30 years, saying it could lead to unfair consumer rate increases to help pay for the plant's construction.
In his veto letter, Quinn said Nicor Gas and Ameren Illinois customers would have been required to pay 95 percent of the costs of the $3 billion plant, to be built by Leucadia National Corp., while receiving just 87 percent of its output, because two Chicago-area utilities had opted not to sign a contract to purchase the plant's output.
The Legislature passed the measure this spring. It would have guaranteed that the company had a market for its synthetic natural gas, produced from Illinois coal and refinery waste.
But utilities said the cost of the synthetic gas would be far greater than for the plentiful and cheap natural gas already available, resulting in big rate increases for consumers.
Ameren spokesman Leigh Morris said the utility cannot make money on the natural gas itself, so would have to raise distribution rates that would "be very expensive for our customers."
Attempts to leave messages for Leucadia late Friday were unsuccessful.
Proponents of the plant said it would guarantee a market for Illinois coal, create jobs and assure gas supplies.
The plant was to be built at the site of a former steel mill, in a neighborhood that already suffers from high levels of pollution, said Josh Mogerman, a spokesman for the Natural Resources Defense Council. He said the plant indicated it would capture and sequester carbon emissions, but there was no guarantee it would.
"There just aren't enough details on this thing," he said.
Quinn said he still supports the so-called Chicago Clean Energy project, but said it must be "implemented in a way that protects the consumers of Illinois."
The Citizens Utility Board, a watchdog group, praised Quinn's decision and said it is willing to work with Leucadia to structure a proposal that is fair to all Illinois consumers.