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Peabody Official Says Plant Not Tied To Federal Incentives

FRANKFORT, Ky. (AP) - Deciding which state to build a lucrative
coal conversion plant doesn't hinge on federal incentives, an
executive for Peabody Energy Corp. said.
Kentucky is up against neighboring states Illinois and Indiana
for the right to be the home of the plant, which could cost $3
billion and create 800 permanent full-time jobs if it is built.
Rick Bowen, Peabody's president of generation and Btu
conversion, said in a phone interview Tuesday that while federal
incentives won't play a role in the company's decision, passing
state tax incentives this summer could keep Kentucky in the
running.
"Federal support is not considered in that analysis," Bowen
said. "Are we better to put it in Illinois, Indiana or Kentucky?
That's what the legislators need to focus on - it has nothing to do
with Washington D.C."
Gov. Ernie Fletcher is considering calling the General Assembly
into a special session on July 5 to deal with tax incentives for
energy companies.
Some state lawmakers, however, aren't sure a special session is
necessary. Jennifer Brislin, a spokeswoman for House Speaker Jody
Richards, said she thought federal incentives were needed before
the proposal could advance.
"Everything that we've seen tells us that the siting and
financial decisions can't be made without definitive action from
the federal government," Brislin said.
State Rep. Jim Gooch, D-Providence, meanwhile, sent Fletcher a
letter in favor of a special session dealing with proposed energy
incentives. Gooch, chairman of the House Natural Resources and
Environment Committee, said lawmakers cannot wait until next year.
"Illinois, Pennsylvania, West Virginia and other states are
moving ahead with economic incentives," Gooch said in a statement.
"We have to move now if we want to be leaders in the energy
field."
Bowen said the company would likely not wait past August for
Kentucky lawmakers to approve a tax incentive package.
Still, state incentives would not guarantee the facility - which
could produce up to 200 million cubic feet of synthetic natural gas
per day - gets built at all, he said.
Bowen said the incentives needed for a coal to natural gas plant
are different from what would be needed for one that converts coal
to liquid.
The energy giant wants to conduct a feasibility study on a
possible location, which would take about nine months to complete,
Bowen said. Such a study involves looking at other matters
including a possible site's location and type of nearby coal, Bowen
said.

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


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