CHICAGO-Illinois Gov. Jim Edgar signed a controversial bill March 14 repealing the Retail Rate Law, which provided incentives for waste-to-energy projects in the state-and already the developer of two tires-to-energy plants has filed a lawsuit. ``We were shocked. We believed (Gov. Edgar) would grandfather the three projects that had bond issues outstanding,'' said Terry Colip, a partner in Chewton Glen Energy Inc., which filed suit within two hours of the repeal.
``Here's the message it sends to the business community: `Don't trust our laws.'*''
The 1988 Retail Rate Law required public utilities to purchase electricity from waste-fuel incinerators in their areas at higher, retail rates and, in turn, the state compensated the utilities' added costs with a tax credit.
Its repeal is expected to derail both Chewton Glen plants-which would use tire-derived fuel-and nearly a dozen other waste-to-energy projects in the state.
Chewton Glen recently opened its first tires-to-energy plant in Ford Heights, Ill., which is undergoing test burns of tire chips. A second plant was under development for Fulton, Ill. The facilities planned to sell power to Commonwealth Edison Co.
Chewton Glen, a three-man company that aspires to construct only two plants, said it chose Illinois because of its Retail Rate Law, the large population and the sufficient number of waste tires to fuel the plants.
A third financed project in jeopardy is a nearly completed municipal waste facility in Robbins, Ill., operated by Foster Wheeler Corp., which also expected to file a lawsuit.
In Chewton Glen's lawsuit against the Illinois Commerce Commission and Commonwealth Edison, the company claims the retroactive nature of the repeal is unconstitutional. Chewton Glen wants its customer, Commonwealth Edison, to be obligated to buy the electricity its facilities produce at retail rates for 20 years, as was the case before the repeal.
According to the suit, the new bill contains no provision that the repeal is to be applied retroactively to the facilities that already were approved to receive the incentives. However, it contends that members of the commerce commission plan to apply the bill in that manner.
The suit also claims the bill Gov. Edgar signed is unrelated to the original Retail Rate bill written in 1987 and therefore should have undergone three readings, which never took place.
Chewton Glen officials have requested an expedited hearing on the suit and expect a resolution by May.