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When a player purchases a power plant above the maximum limit, and must discard one, does the discard go under the stack of power plants, into a separate pile, or is it removed from the game?

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They are discarded, which pretty much means they are removed from the game. The only time a power plant is put back under the stack of plants is during Phase 5: Update the power plant market.

Once a plant is discarded (because of too many plants) or removed from the game (no one bids on a plant in a turn, or someone's house count is higher than a power plant number), they aren't coming back, so "discarded" and "removed from the game" are pretty synonymous.

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