Governor To Call Special Session

Gov. Ernie Fletcher said Wednesday he intends to call lawmakers into special session on July 5

The governor is urging the lawmakers to approve financial incentives to help the state attract companies that specialize in converting coal to liquid fuels.

"The primary focus of the call will be energy," Fletcher said in a letter to legislators. "I urge you to express your desire to pursue this extraordinary opportunity and to support this legislation in a special session."

Fletcher, trying to build his case for the special session, provided lawmakers with letters from four companies that say the state needs to offer incentives in order to compete with other states.

Peabody Energy Corp. is considering building a coal conversion plant in Kentucky that could cost up to $3 billion and bring up to 800 full-time jobs, according to one of the letters released late Tuesday.

Peabody wants to decide this summer where to build the plant, and Kentucky would need to pass financial incentives to stay in the running, according to a letter from Rick Bowen, Peabody's president of generation and Btu conversion.

"Although it would be premature for us to commit to locating this facility in Kentucky, if the commonwealth were to offer these financial incentives, it is unlikely that we could convince our investors to site this project in Kentucky without them," Bowen said in the letter.

Legislative leaders in the House and Senate, however, have not agreed on whether such a session would be necessary now or whether the proposed legislation could wait until early next year when the legislature is scheduled to reconvene.

A plan outlined at a state energy subcommittee last week would offer about $315 million in tax incentives to a plant that met certain criteria.

Smaller incentives would be offered to smaller plants, but the tax breaks would be based on performance. The plan would give the
incentives over 25 years to a $2.5 billion coal-to-liquid plant.

(Copyright 2007 by The Associated Press. All Rights Reserved.)

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