US tyre-burning power plant closes after legal, financial problems

By Steve Daniels, Crain News Service

Chicago, Illinois - A Ford Heights, Illinois, facility that burns tyres to produce electricity has closed after failing to win passage last year of a state law to get tyre-burning deemed a renewable fuel source.

The plant, operated by Geneva Energy L.L.C., has twice entered and emerged from bankruptcy since beginning operations 15 years ago and is facing yet more questions about its future.

After shuttering the plant last month, Geneva Energy is working on improvements to make the facility more efficient and hopes to restart sometime in May, CEO Benjamin Rose said in an interview. In the meantime, he's had to lay off about 10 workers, half the employees running the plant in the economically disadvantaged south suburb of Chicago.

Once the plant restarts, “we'll be expecting to do it on a one-month test, and then we're not sure,” he said.

The $100-million tyre burner was built under the state's now repealed Retail Rate Law, which promised higher-than-market power rates to developers of incinerators and other waste-to-energy facilities.

The law was repealed months after the tyre burner began operating, and ever since, a succession of owners has struggled to make a profit selling the power the plant produces on the wholesale market, Mr. Rose said.

Last year, Geneva Energy attempted to boost its revenue by lobbying for a state law that would have categorized tyre-burning as a renewable energy source, giving purchasers of the plant's electricity the ability to count it toward meeting state mandates for renewable use.

Mr. Rose estimated the law would have increased the plant's revenue 10 to 20 percent by allowing it to negotiate long-term sales contacts, rather than leaving it subject to today's low market prices.

The bill passed the state House but fell short in the Senate after environmental groups lobbied for its defeat.

“We're not here to stand in their way, but let's have truth-in-energy labeling here,” said Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center, which lobbied against the bill. Tyre burning “shouldn't be masquerading as clean energy.”

Mr. Rose said the plant uses state-of-the-art pollution controls that make it significantly “cleaner” than a coal-fired power plant.

The plant is designed to burn up to 6 million tyres a year but never has topped 3.5 million, Mr. Rose said. It generates up to 18 megawatts of power.

This article appeared on the website of Crain's Chicago Business magazine, a sister publication of Tire Business.

From Crain's Chicago Business (A Crain publication)