Illinois targets coal plant closures before all bonds retire

Link: https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202106071513SM______BNDBUYER_00000179-e7af-dd1a-ab7d-efefe4190001_110.1

Excerpt:

A proposed mandate to shutter the $5 billion Prairie State coal energy campus and a Springfield, Illinois? plant by 2035 would hit local ratepayers with the double burden of funding new energy sources while still paying down project bonds, a bipartisan group of state lawmakers warn.

Gov. J.B. Pritzker backs a state mandate to end coal generation by 2035 to meet de-carbonation targets included in pending energy legislation. The package stalled during the General Assembly?s spring session that ended last week, but Pritzker said he expects lawmakers will return in the coming weeks for a vote.

…..

Retiring Prairie State early would mark the latest headache for some of the nine public utilities in Illinois, Indiana, Kentucky, Missouri, and Ohio that issued $4.5 billion of debt, some it under the federal Build America Bond program, to finance their ownership in project.

Peabody Energy Inc. initially sponsored the project in Washington County promoting it as an affordable source of energy with an adjacent mine and a cleaner one given its state-of-the-art technology at the time. Bechtel Power Corp. built it. It initially carried a $2 billion price tag that rose to a $4 billion fixed cost under the 2010 contract with utilities but cost overruns drove the price tag up to $5 billion.

Author(s): Yvette Shields

Publication Date: 7 June 2021

Publication Site: Fidelity Fixed Income

Bipartisan Agreement AKA Multiemployer Pension Bailout

Excerpt:

Two years ago retired coal miners traveled to Washington, D.C. to lobby lawmakers to put in place a federal safety net in case the United Mine Workers of America (UMWA) pension fund fails. Coal plant closures and company bankruptcies have sent the pension fund to the edge of collapse. In October, 2019 Murray Energy, the last major company propping up the dwindling fund, also went bankrupt and the prediction was insolvency in FY23.

From their 5500 form for the year ended 6/30/19 confirming the timeline.

Author(s): John Bury

Publication Date: 2 February 2021

Publication Site: Burypensions