The Commercial-News, Danville, IL

December 28, 2010

Dynegy to shut down plant

BY BRIAN L. HUCHEL
Commercial-News

OAKWOOD — After more than five decades, the Dynegy power plant on the Middle Fork of the Vermilion River is shutting down.

Dynegy Inc. released a statement Tuesday morning announcing plans to “mothball” the coal-burning Vermilion Power Generation Facility near Oakwood by the end of the first quarter of 2011. The facility — made up of two turbine units — celebrated its 50th anniversary in 2006.

David Byford, senior director of public relations for the Houston-based company, confirmed the decision, saying it had been under consideration for the last year.

Costs, according to Byford, represented one of the biggest reasons for the decision to suspend operations. While similar Dynegy facilities in Illinois receive coal directly via the railway, the local power plant is not along a rail line, forcing it to truck in coal received in Danville.

“That creates extra costs for us,” he said.

Local economic development officials and city representatives could not be reached for comment Tuesday afternoon on Dynegy’s decision.

In recent years, about 120 trucks a day delivered coal that is pulverized and blown into the furnace portion of the plant’s boiler system. The facility had the capacity to burn 1,800 tons of coal a day.

Byford said the other big factor that led to the closing is the market economics, pointing to a weak electricity demand and lower power prices. The smaller size of the facility and older technologies were cited in the company press release as factors in the final decision.

In the end, the company is “faced with poor plant economics that do not favor continued operations,” according to a statement from Lynn A. Lednicky, Dynegy’s executive vice president of operations.

The 176-megawatt per hour coal-burning facility operates 24 hours a day, seven days a week and produces enough electricity to supply 40,000-50,000 customers. One of the turbines generates 77 megawatts of power an hour, while the other produces 105 megawatts an hour.

Calling it a suspension of operations, Byford could not comment on what will happen in the future for the plant, including the potential for reopening at some point.

He noted any future decisions regarding the plant will depend upon “market conditions.”

Currently, 50 employees work at the plant, down from 65 in 2006. With the move to suspend operations, Byford did not comment on how many people will lose their jobs with the suspension of operations.

Tuesday’s decision by Dynegy comes a little more than a year after the company opted to sell the Tilton Energy Center as part of a package designed to give the company additional operating cash and cut costs. The Tilton Energy Center was officially sold to LS Energy of New York, N.Y., in December 2009.