Illinois sites make short list for FutureGen coal plant

After competing with eight sites nationwide, Mattoon and Tuscola, Ill., have made a short list of possible locations for the FutureGen clean-coal power plant.

The FutureGen Industrial Alliance is a coalition of coal companies and electric utilities that is working with the U.S. Department of Energy to design and build the plant. The $1 billion public-private partnership aims to build the world’s first coal-fueled, “zero emissions” power production plant.

Seven states, including Illinois, submitted proposals in May for the plant. Illinois, Ohio and Texas submitted two proposals for a plant location, and Kentucky, North Dakota, West Virginia and Wyoming submitted proposals for one location each.

The FutureGen Industrial Alliance will announce its final selection from the four remaining sites on the short list in September 2007. The other sites under consideration are in Odessa, Texas, and near Jewett, Texas.

Of the Illinois sites, Tuscola, located in Douglas County, sits about 26 miles north of Mattoon, which is in Coles County. Both sites are more than 120 miles northeast of St. Louis.

St. Louis-based Peabody Energy (NYSE: BTU) is a member of the FutureGen Industrial Alliance. Peabody is one of the world’s largest coal producers.

In response to a March 7 request for proposals, Illinois submitted proposals in May to host the plant in or near the communities of Effingham, Marshall, Mattoon or Tuscola.

A $17 million direct grant from a clean coal technology fund tops off what is believed to be the nation’s most aggressive investment package to bring FutureGen to Illinois. The grant, which can be used for a wide range of project costs, is part of Illinois Gov. Rod Blagojevich’s budget for fiscal year 2007, which was recently adopted by the Illinois General Assembly and signed by the governor.

State support, in addition to the $17 million grant from the Coal Development Fund, includes an estimated $15 million sales tax exemption on materials and equipment through local Enterprise Zones. Additional project-related funding is available through the Illinois Coal Competitiveness Program, the Illinois Clean Coal Institute and the public-private partnership Illinois Clean Coal Review Board.

Additionally, there is $50 million set aside by the Illinois Finance Authority for below-market-rate loans to the Alliance.

Published July 26, 2006 by the St. Louis Business Journal