Energy Plan Unveiled; Incentives Included

DRAKESBORO, Ky. (AP) - A plan presented Friday would provide $315 million in tax incentives to a plant that would produce 30,000 barrels of transportation fuel daily from coal.

Smaller incentives would be offered to smaller plants, but the tax breaks would be based on performance, state Sen. Robert Stivers, R-Manchester, told lawmakers.

The plan would give the incentives over 25 years to a $2.5 billion coal-to-liquid plant, the Lexington Herald-Leader reported.

Stivers, co-chairman of the Special Subcommittee on Energy, presented the plan at a meeting at the Tennessee Valley Authority coal power plant in Muhlenberg County.

He said developers and the state are discussing at least three coal-to-liquid projects - a 30,000-barrel-a-day plant in western Kentucky and 10,000-barrel-a-day plants in Pike County and near Ashland.

Sen. Jerry Rhoads, D-Madisonville, said possible sites in western Kentucky for the large plant are Union, Muhlenberg, Ohio and Webster counties. He noted that Sturgis in Union County has quick access for coal barges via the Ohio River.

Rhoads said the investment could create 2,000 construction jobs over four years and "several hundred" permanent jobs. It would use 6 million tons of coal a year, he said.

Stivers said more specifics of the plan will be discussed Monday at an energy symposium in Pike County and a legislative budget committee hearing next week in northern Kentucky.

The plan has been developed by state senators in recent weeks, and Stivers said it is "not carved in stone."

The plan is modeled on an omnibus energy bill presented in this year's General Assembly by House Majority Leader Rocky Adkins, D-Sandy Hook. The Senate and House could not agree on differing versions of the bill.

Gov. Ernie Fletcher, a Republican seeking re-election in November, is considering a special legislative session this summer, possibly in early July, to take up the plan.

Information from: Lexington Herald-Leader,

(Copyright 2007 by The Associated Press. All Rights Reserved.)
AP-NY-06-15-07 2007EDT