Peabody proposes 1,500 MW Illinois power plant

By the OGJ Online Staff

HOUSTON, Oct. 23, 2001 — Peabody Energy Corp. said it filed a permit application for a 1,500 MW coal- fueled electricity generation project in southern Illinois that could supply power to up to 1.5 million homes.

The nation’s No. 1 coal company said if the plant receives regulatory approval construction could start late next year or early in 2003 and could take up to 4 years to complete. The project would include a 6 million ton-per-year underground coal mine. Peabody didn’t say how much the proposed plant is expected to cost.

The St. Louis, Mo., company said in a statement the facility is “expected to be among the cleanest coal-fueled plants in the Midwest.” The design is similar to the company’s proposed Thoroughbred Energy Campus in western Kentucky, which is also being built as a mine mouth plant.

Peabody said it also planned to secure partners for the projects with complementary skills in generating plant construction, operations, and power marketing.

“Events of the past year have taught us that reliable, low-cost energy is essential to our economy, and that energy independence remains a top priority for America,” said Peabody CEO Irl F. Engelhardt.

Interest in coal-fired plants revived after last year’s big jump in natural gas prices, and some coal rich states rushed to adopt incentives to encourage coal production. Illinois adopted a plan to sell $3.5 billion in bonds last summer in addition to tax incentives and credits.

“Peabody is the first company to utilize tax incentives in the Illinois coal package that was signed into law with the broad support of the General Assembly,” said Illinois Gov. George Ryan. US Rep. John Shimkus (R-Ill.), a member of the House Energy and Commerce Committee, said he hoped federal incentives for the development of coal will also be adopted.

Clean coal programs were a part of President George Bush’s proposed energy plan. A House-passed bill includes $2 billion in a 10-year program to encourage cleaner coal technologies. The Senate hasn’t acted on a similar proposal.

Peabody said it will to explore other generation development opportunities to maximize the value of the company’s 9.3 billion tons of coal reserves and 300,000-plus acres of land holdings.

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