Mattoon Ill picked for FutureGen pollution free coal plant December

							Mattoon, Ill., picked for FutureGen pollution-free coal plant
December 19, 2007


MATTOON, Ill.: Curt O'Dell thinks his little eastern Illinois city has just gotten its own
Christmas miracle.

The developers of the $1.8 billion FutureGen power plant picked Mattoon — a rust belt
location of about 18,000 that has watched a number of factories leave over the years —
over two sites in Texas and another in Illinois as the new home for a low-pollution energy
production experiment.

"There is still a God," the 60-year-old O'Dell said while eating a cheeseburger at a Burger
King downtown. "A lot of people here have been praying for this."

Residents' rejoicing, though, dimmed a little later Tuesday when for the second time in a
week the Department of Energy issued a warning about the project, this time saying the
coal-fired power plant might cost too much.

"Projected cost overruns require a reassessment of FutureGen's design," James Slutz, the
DOE's acting principal deputy assistant secretary, said in a statement promising more
details next month. FutureGen, intended to burn coal without the heavy pollution
associated with the fuel, is a public-private partnership, with the DOE providing 74
percent of the money.

The head of Coles County's economic development agency said she did not believe the
DOE's statement would jeopardize the project.

"I don't know how to read that except DOE is covering all of its bureaucratic bases," said
Angela Griffin, president of Coles Together. "I'm not alarmed, I'm not concerned. I think
they'll work it out."

The DOE in March "signed off on the very costs estimates that they're now expressing
concern over," said Lawrence Pacheco, a spokesman for the FutureGen Alliance, the
group of power and coal companies providing the rest of the money for the plant. He
called Slutz's statement "a little baffling."

"Restructuring the FutureGen facility and the program would only add years of delay and
more costs," Pacheco said. "So the alliance is eager to find out what the DOE has in
mind, but in the meantime it will continue to honor its agreements with the DOE and
move the project forward."

FutureGen is expected to bring hundreds of permanent jobs and 3,000 construction
openings. Mattoon, about 185 miles south of Chicago, was chosen over nearby Tuscola


                                                                                             1
and two Texas towns, Jewett and Penwell.

"I know this is the biggest economic development opportunity for east-central Illinois in
decades, so Merry Christmas Mattoon," said Gov. Rod Blagojevich, who arrived after the
announcement came from Washington, D.C.

A standing-room-only crowd of about 400 watched the announcement on a big screen in
the former Times Theater downtown.

They erupted in a roar and high-fives when the town was chosen. Some cried, while
others made cell phone calls to notify those who couldn't be there that "We won!"

The FutureGen Alliance will be in Mattoon on Wednesday to begin seismic surveys of 16
square miles of land, Griffin said. Officials have said they hope to begin construction by
July 2009, with the plant operating by 2012.

Meanwhile, city officials said they must construct an elaborate system to get treated
wastewater — 3,000 gallons a minute — to the site, build a road that can handle heavy
construction equipment, and hire a city planner. City attorney Preston Owen said they'll
even examine their subdivision code to see if the city is prepared to handle an influx of
new housing construction.

President Bush has touted FutureGen as key to developing carbon-free coal-burning
power plants. It is supposed to be virtually pollution-free and produce both electricity and
hydrogen — while its carbon dioxide, a leading greenhouse gas, is to be captured and
stored deep underground.

Environmentalists said they're eager to see if the technology delivers on its promises.

For the coal industry, besieged by questions about its role in global warming, "this is sort
of their last stand. This is it," said Bruce Nilles of the group's Midwest Clean Energy
Campaign.

FutureGen also has been under increasing scrutiny in Congress. Some lawmakers have
questioned its soaring cost — nearly double the $950 million originally projected — and
several delays.

Then last week, Slutz told the FutureGen Alliance in a letter that it was "inadvisable" to
announce a site, saying the DOE was still examining public comments received in
response to environmental reviews of the four sites.

The project has been the subject of intense lobbying.

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



                                                                                              2
Both Illinois and Texas passed laws indemnifying the alliance of any legal entanglements
arising from the plant's carbon dioxide.

The alliance members — including major U.S. coal-burning utilities American Electric
Power Co. and Southern Co., and the country's largest coal producer, Peabody Energy
Corp. — have committed $400 million over 10 years.

Congress is giving the program $75 million this year, $33 million less than the
administration wanted. Committees overseeing Energy Department spending expressed
concern that FutureGen was siphoning money away from other clean-coal programs.

Tuscola and Douglas County officials said the process helped spotlight the region's
economic-development potential.

"I'm not going to be too shook up about the fact that I've got a $2 billion project going in
20 miles down the road," said Brian Moody, Tuscola's economic development chief.

Finishing up his lunch, O'Dell, who owns a plumbing business, recalled Mattoon's woeful
recent economic history, listing shuttered plants that manufactured everything from
heavy springs to truck trailers.

FutureGen means hope for people like him, O'Dell said.

"They're always gonna need a carpenter," he said. "They're always gonna need an
electrician, a plumber."

___

Associated Press writers H. Joseph Hebert in Washington, Betsy Blaney in Texas, and
Southern Illinois correspondent Jim Suhr contributed to this report.




                                                                                               3