Company set to challenge sulfur dioxide tax
Thursday, February 22, 2007
by Mike Nolan Staff writer
A Chicago power company said it may go to court to challenge a new Cook County tax on sulfur dioxide emissions, approved by county commissioners Wednesday.
Midwest Generation, which operates coal-fired power plants around the Chicago area, said it was already taking steps to curb sulfur dioxide output at its plants.
The tax, approved by commissioners in a 10-to-5 vote, would target coal-burning power plants and other facilities that generate sulfur dioxide. The county would levy a tax of $400 a ton beyond a 100-tons-per-year limit of sulfur dioxide emissions.
County board President Todd Stroger, who has pledged no new county taxes, wasn't sure whether he'd veto the emissions tax.
"Different people have come and said different things about it," he said after the vote. We'll see what the legal opinion is."
Stroger said he wasn't counting on revenue from the tax, estimated at $3 million annually, in this year's budget.
The American Lung Association of Metropolitan Chicago, which endorsed the tax, said revenue from it would help pay for the medical care of county residents affected by sulfur dioxide emissions.
Midwest Generation, which several years ago bought ComEd's Chicago-area power plants, said it had already committed to reducing sulfur dioxide and other pollutants at its plants.
"We are doing exactly what the county board members are calling on us to do," Doug McFarlan, the company's vice president of public affairs, said Wednesday.
If Stroger doesn't veto the tax, Midwest Generation would likely challenge it in court, he said.
The company's two coal-fired electric plants in Chicago emit between 10,000 and 15,000 tons of sulfur dioxide annually, depending on power demands. Midwest Generation sells electricity it produces to utilities, such as ComEd, and other customers.
In December, Midwest Generation announced a 10-year agreement with the Illinois EPA to invest in the neighborhood of $3 billion to reduce emissions of sulfur dioxide, nitrogen oxide and mercury at its Illinois power plants.
"We are appalled that this punitive tax is being slapped on top of the significant investments we are making," McFarlan said.
He had testified against the tax during the county's finance committee meeting Tuesday. McFarlan said the company became aware of the tax proposal less than two weeks ago from media reports.
Another company that could be impacted by the tax is Corn Products International. Its largest U.S. plant, in Bedford Park, uses coal-fired boilers in corn refining and to generate steam and electricity.
"We are going to take a look at it (the tax) and see what it's all about," Mark Lindley, spokesman for the Westchester-based company, said.
Contributing: Staff writer Jonathan Lipman.