Court reinstates Illinois incinerator subsidy

Illinois, USA can no longer deny subsidies for a trio of bond-financed waste-to-energy incinerators in the state, a judge said this week in a ruling that may allow the incinerators to seek monetary damages against the state and an electric utility.



Reuters reports that Cook County Circuit Court Judge Robert Boharic ruled that a 1996 Illinois law that yanked the subsidy cannot be retroactively applied to projects that were already under way at the time the law was enacted. He added that he planned to enter a permanent injunction against the application of the law to the incinerators that sued Commonwealth Edison, a unit of Exelon Corp. , and the state of Illinois over the matter.



Boharic’s ruling came more than six years after incinerator developers filed their lawsuits challenging the state Legislature’s repeal of the Retail Rate Act that was spurred by intense lobbying by environmental activists. The act had enabled incinerators to sell electricity they generated to Commonwealth Edison at a higher-than-market rate. The electric utility then became eligible for tax credits equal to the difference between the higher rates and market rates.



The incinerator developers, who had largely depended on the higher rates to pay off nearly US$500 million of unrated, tax-exempt revenue bonds, claimed the retroactive repeal of the act was unconstitutional.