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Quinn vetoes synthetic gas plant legislation

Associated Press Modified: August 10, 2012 at 8:45 pm •  Published: August 10, 2012

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."

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