Tenaska has received a $417m investment tax credit for the Taylorville Energy Center (TEC) project from the US Department of Energy (DOE) and the US Treasury Department.
Cost savings from the tax credit will be passed through to Illinois electric utility customers under the Illinois Clean Coal Portfolio Standard Law.
The DOE has certified the project and ranked the TEC first among bituminous coal projects that capture at least 65% of its CO2 emissions, enabling the plant to receive this federal tax credit.
The TEC is expected to cost $3.5bn and will be the cleanest coal-fed commercial-scale power plant in the US, converting Illinois coal into substitute natural gas to produce electricity.
Illinois Power Agency director Mark Pruitt said that as new environmental rules push conventional coal plants out of the market, Taylorville and projects like it must come online to replace that lost baseload power.
"These baseload plants are needed to balance the supply and price volatility caused by the growing number of variable-output renewable power projects in our state's energy portfolio," Pruitt said.