Seven states vie for futuristic power plant

updated 5:48 p.m. ET June 18, 2006

ST. LOUIS - In fierce bidding reminiscent of efforts two decades ago to win the superconducting super collider, seven states are aggressively trying to land a billion-dollar power plant prototype that's virtually pollution free.

Home to a third of the dozen sites chasing FutureGen, Illinois has up to $80 million in incentives on the table, from grants to low-interest loans. Ohio is offering twice that, while Texas has passed a law making it responsible for any legal entanglements stemming from the coal-fired plant's carbon dioxide emissions. Wyoming is offering incentives worth about $31 million and points out its coal to fuel the plant is cheaper than eastern coal.

"I think we have a substantial package," said Rob Hurless, energy policy adviser to Wyoming Gov. Dave Freudenthal.

Some of the states are ponying up everything from sales-tax relief to free land, pushing the enticements into the hundreds of millions of dollars in the hunt for more than 1,000 construction jobs and 150 permanent ones, along with the researchers and side businesses the plant should attract.

Did anyone mention the bragging rights?

"One of these sites ultimately will become known worldwide as the place where a new generation of zero-emission energy plants made its debut," Energy Secretary Samuel Bodman said recently after the 12 candidate sites were announced.

The finalists will be tapped this summer, with the winner to be announced next year — five years before the plant is expected to be running.

Touted as the power plant of tomorrow, FutureGen involves technology that converts coal into highly enriched hydrogen gas that burns cleaner than coal. Plans call for the 275-megawatt plant to capture most of its emissions of carbon dioxide _ a "greenhouse" gas widely blamed for global warming _ and inject them permanently into underground reservoirs, a process called sequestration.

A FutureGen alliance made up of a handful of coal and electric companies, including St. Louis-based Peabody Energy Corp., has committed more than $250 million to the project. The U.S. government is putting up about $700 million.

"It's a big deal," says John Grasser, spokesman for the Energy Department's Office of Fossil Energy. With two dozen states once inquiring about the project, for the victor "it's going to be an honor to have that science in that state."

The alliance's criteria have included a site's access to coal, water, rail lines, power transmission and underground geology that would allow permanent storage of carbon dioxide waste.

From there, states have sweetened the pot considerably.

Illinois is offering a $17 million grant to help pay for various project costs, as well as an estimated $15 million in sales tax exemptions on materials and equipment through local enterprise zones. The state also has set aside $50 million for below-market rate loans to the FutureGen alliance.

Additional property and sales tax abatements would be available at the four Illinois sites — Effingham, Marshall, Mattoon and Tuscola — pursuing the project.

"We believe we have a very good chance," says Andrew Ross, a spokesman for Illinois' Department of Commerce and Economic Opportunity.

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