Letter: Peabody Considering Plant in Ky.
June 20, 2007, 11:08AM
By JOE BIESK Associated Press Writer
© 2007 The Associated Press
chron.com
FRANKFORT, Ky. — 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. |
