The Marchetti model assumed that by the end of 2003, Illinois power generators had 5.4
gigawatts of SCR and 1.0 gigawatt of scrubbers operating on their coal-fired units. It
also assumed by 2009, 14.4 gigawatts or 84.1 percent of the State’s current coal-fired
capacity of 17.0 gigawatts will be burning low sulfur sub-bituminous coal with SO2
emission rates of 0.7 lbs/mmBtu or less. In addition, Illinois power generators will have
almost 890,300 Acid Rain Program SO2 allowances banked at the end of 2009, which can
be used to meet the CAIR reduction targets. For Illinois power generators to meet the
SO2 CAIR reduction targets in 2010 and 2015, in which allowance trading is restricted to
Illinois-only, the model predicted they would have to install approximately 8.6 gigawatts
of scrubbers, while 334 megawatts would switch to a lower sulfur coal for compliance.
Of this total incremental scrubber capacity, 6.3 gigawatts or 73.2 percent will not be
installed until 2014 or thereafter.
The primary factor that affects this deferred scrubber deployment, even under this
restrictive trading regime, according to Marchetti at this stage of the analysis, is the
sizeable Acid Rain Program bank, which does not begin to be significantly drawn down
until 2014. Under these same trading restrictions for NOx, Illinois power generators
would install 4.7 gigawatts of SCR technology and 6.7 gigawatts of SNCR technology.
In addition, the 5.4 gigawatts of existing SCR technology capacity would operate year
round in meeting the NOx reduction targets of CAIR. Compliance under the mercury
MACT cap-and-trade capacity (17.0 gigawatts) would be achieved by installing some
kind of mercury removal technology.
According to the preliminary draft of this analysis, the level of coal-fired units requiring
major control technology retrofits increases significantly between the two regulatory
regimes. This increase is precipitated by the restrictive Illinois-only trading regime,
which forces power generators to install technology in order to meet the statewide caps.
To comply with CAIR and mercury cap-and-trade reduction targets with Illinois-trading
only, Illinois power generators between 2010 and 2020, inclusively, will have to expend
$4.8 billion in compliance costs. This would equate to an annual cost of $480 million or
20 percent greater than the cost of complying with these rules as part of the regional
program for 28 states and District of Columbia.
Potential Impact to Jobs
Coal Mining Jobs
The state’s coal producers and miners have struggled for survival despite a
complex series of events that have forestalled a long-awaited revival in the coal
fields of Illinois. At the end of 2003, coal production in Illinois totaled 31.1
million tons, down more than 2.3 million tons from 2002. Twenty mines
continued to operate in an area stretching south nearly to the tip of Illinois from
Danville on the east and Logan and McDonough counties in central Illinois.
However, the erosion of employment and tonnage, dating back to the Clean Air
Act Amendments of 1990, continued with the closing of the Rend Lake Mine in
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