Coal-, oil-fired units to be closed by Ameren due to EPA rules

Ameren Energy Resources Co. LLC (AER), the holding company for the merchant generation business of Ameren Corp. (NYSE: AEE), said the 369 MW Meredosia and 151 MW Hutsonville energy centers will cease operating by the end of 2011.

Both energy centers are part of Ameren Energy Generating Co., a unit of AER. Meredosia Energy Center consists of one 203 MW, coal-fired unit and one 166 MW, oil-fired unit. The Hutsonville Energy Center has two coal-fired units. Both facilities provided approximately 4 percent of AER's total generation over the last two years.

Ameren said the closure of these units is primarily the result of the expected cost of complying with the Cross-State Air Pollution Rule (CSAPR) issued in July 2011 by the U.S. Environmental Protection Agency (EPA). CSAPR requires reductions in sulfur dioxide (SO2) by 73 percent and nitrogen oxide (NOx) by 54 percent from 2005 levels.

"CSAPR tightens the restrictions on SO2 and NOx emissions to the point that we cannot continue to economically operate these units," said AER President and Chief Executive Officer Steven R. Sullivan.

The Meredosia Energy Center is also the proposed site for a full-scale, oxy-combustion coal-fired plant for capture and storage of carbon dioxide (CO2).  In 2010, AER announced a cooperative agreement with the U.S. Department of Energy (DOE) that would provide funding for this project at Unit 4 at Meredosia. It is part of FutureGen 2.0, which calls for transporting the captured CO2 over a pipeline to an Illinois storage facility developed by others.

"Ceasing current operations at Meredosia has no impact on the viability of FutureGen 2.0," said Sullivan.

Another factor driving the closure of operations at these facilities is a lack of a multi-year capacity market managed by the Midwest Independent Transmission System Operator (MISO). Sullivan said that without the ability to sell capacity several years out, the company cannot afford to make the substantial investment for environmental controls that would be required to keep these units in service.

Ameren Energy Generating Co.’s net investment in the Hutsonville and Meredosia plants totaled $26 million and $1 million, respectively, as of June 30, 2011.

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