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* Plant to cut emissions, had been seen online in 2015
* Taylorville selected for federal loan guarantee
(Adds Tenaska comment) -
NEW YORK, Jan 12 (Reuters) - The Illinois Senate on Wednesday rejected Tenaska's proposed $3.5 billion Taylorville coal-to-gas-fired power plant, a spokesman for Tenaska told Reuters Wednesday.
Tenaska said the lack of legislative support would stall development of the 602-megawatt gasification plant which had been selected for a $2.6 billion federal loan guarantee and a tax credits exceeding $400 million. The plant had been seen in operation in mid-2015.
"We are evaluating our next course of action," said Bart Ford, Tenaska vice president.
The Taylorville project required state approval because Tenaska of Omaha, Nebraska, was seeking to recover costs for building and operating the plant from power ratepayers.
But since Illinois restructured its power market in the late 1990s, the cost of building and operating power plants is the responsibility of the generation owners, not ratepayers.
Ford said the vote was "disappointing" given a favorable vote in November from the Illinois House of Representatives and support from other elected officials and organized labor.
"Throughout the legislative process, we challenged opponents of the legislation to explain how a cutting-edge baseload project like (Taylorville) could be built without legislation," Ford said in a statement. "We renew that challenge now."
Since Illinois restructured its power market, generation owners have built mostly natural gas-fired power plants. No baseload coal or nuclear plants have entered service since the late 1990s when what is now Exelon Corp (EXC.N) completed some nuclear reactors.
Reporting by Scott DiSavino and Eileen O'Grady in Houston; Editing by David Gregorio