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Peabody Considering High-Tech Plant In Kentucky

FRANKFORT, Ky. (AP) - 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 a
letter released late Tuesday.
Gov. Ernie Fletcher's administration released the letter in an
effort to underscore the need for calling the General Assembly into
a special session to deal with possible tax incentives for energy
companies, a spokeswoman for the governor said.
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.
"Without the financial development incentives similar to those
of neighboring states, Peabody would be unable to consider locating
this initial project in Kentucky," Bowen wrote in his May 31
letter to Fletcher. "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."
Fletcher, who is seeking re-election in November, has said he's
considering calling lawmakers into a special session later this
summer to deal with an energy bill and possibly other matters.
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.
State Sen. Robert Stivers, R-Manchester, has said developers
have been considering at least three coal-to-liquid plants in
Kentucky.
House Majority Leader Rocky Adkins, D-Sandy Hook, proposed an
energy bill in the legislature earlier this year, but it stalled
after the two chambers could not agree.
Fletcher spokeswoman Jodi Whitaker said the governor was
continuing to talk with companies and with state lawmakers on
details of the legislation.
"This letter points out the urgency of a special session in
order for Kentucky to be competitive in energy and clean-coal
technology," Whitaker said.
Peabody is currently considering putting one of the high-tech
plants, which could produce up to 200 million cubic feet of
synthetic natural gas per day, in either Illinois, Indiana or
Kentucky, Peabody spokesman Vic Svec said. The company is also
considering a separate facility out west, possibly in Arizona,
Wyoming or Montana, Svec said.
"We are in the early stages of evaluating a facility -
coal-to-gas as well as coal-to-liquid - in the midwest," Svec
said.

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


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