Plug this gas leak
Chicago Tribune Editorial
February 5, 2011 — The same bunch that stuck you with a much bigger Illinois income tax wants you to pay more for your utilities, too.

State lawmakers recently approved a pair of coal-to-natural-gas conversion projects. These huge plants will put residential consumers and small businesses on the hook to pay for the energy they produce for years, potentially at rates far above the market. Yes, consumers would have no meaningful protection against much higher gas prices.

It's up to Gov. Pat Quinn to veto these bills.

The plan for a Leucadia National Corp. plant on Chicago's South Side would turn Illinois coal and refinery waste into a synthetic form of natural gas. The plant would rise on the brownfield site of an old steel mill. That's where its positive attributes stop.

Under legislation sent to the governor, the gas from this plant would be allocated in a grossly unfair manner to four major utilities. The customers of North Shore Gas would be stuck with buying by far the largest share. The law would require utilities to enter 30-year contracts, locking in the anticipated high prices. Large customers, including most state agencies, would be free to buy their gas on the competitive market, potentially at a much cheaper price. You the consumer wouldn't get that option.

Just as bad, this deal lacks any rate cap or other reliable cost-overrun protections. Consumer advocates see rates for this gas soaring, oblivious to market forces. The plant's developer says its gas would be a good deal for customers over time. But who is protected by this proposed law? The developer, that's who.

The General Assembly's approval of a second plan, from Aurora-based Power Holdings LLC, presents similar problems. The entrepreneurs behind this project would build it in southern Illinois' Jefferson County, though its economic impact would weigh on the entire state. It, too, won approval without protection from rate spikes and cost overruns. It, too, allows large customers to buy their gas on the market, but locks in small consumers. The bill mandates 10-year contracts requiring utilities to take the gas even if they could find it cheaper somewhere else.

Proponents argue that these projects will create jobs, reduce pollution and protect a market for Illinois coal. All worthy endeavors, though the number of permanent jobs at each facility would be modest. The problem is the enormous trade-off in consumer cost. The Leucadia and Power Holdings projects look like they could be numbingly expensive.

Governor, take note: These bills are opposed by the Citizens Utility Board, the consumer watchdog organization you had a huge role in creating many years ago. Here's an opportunity to take CUB's advice, an opportunity to protect consumers in the state.

Break out the veto pen.