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March 13, 2003

Blagojevich promotes proposal to revitalize state’s coal industry, create jobs

Governor continues his push—unveiled in State of the State speech— for incentives to businesses that invest in new technologies

Healthier environment & 20,000 new jobs could result from plan to encourage construction of plants that will scrub and burn Illinois coal

CANTON – As part of an aggressive effort to create thousands of new jobs, Gov. Rod R. Blagojevich today promoted the use of advanced technology to allow companies to burn coal mined in Illinois.

Speaking at the Duck Creek power plant in Canton, Blagojevich outlined financial incentives that would make Illinois coal more competitive, meet federal environmental standards and help revitalize an industry that has fallen on rough times. By persuading just five businesses to take advantage of the incentives, the governor estimated that 20,000 new jobs could be created in central and southern Illinois.

Blagojevich said that his proposal represented a new way of approaching the issues and stood in contrast to previously-held notions that suggested that economic and environmental concerns were mutually exclusive.

“For most of the past century, we were taught to believe that it was impossible to create jobs and protect the environment at the same time,” he said. “This plan would lead to progress in both areas. Technology will allow our power plants to burn Illinois coal again—bringing back jobs and revitalizing communities across southern and central Illinois.”

Blagojevich first promoted the idea Wednesday in Springfield during his first State of the State speech.

If enacted, the governor’s proposal would provide substantial relief to a coal-mining industry that has suffered in recent decades as stricter federal air standards have forced many power companies to burn coal from Western states rather than coal mined in Illinois. Because of higher contents of sulfur and other materials, Illinois coal is considered “dirtier” than coal found in other parts of the nation.

Blagojevich’s plan would bring welcome assistance to a number of communities around the state that have experienced severe job losses and sharply diminished tax bases as a result of the growing inability to make use of one the state’s most abundant resources. Despite having the nation’s second-largest base of proven coal reserves, coal mined in Illinois is often unusable for many power-generation firms.

Enactment of the governor’s idea, however, would encourage power plants to implement recent advances in “clean coal” technology. As a result of making such improvements at these facilities or taking other steps, a higher number of Illinois’ power plants could burn coal that is mined in the state.

Blagojevich’s plan calls for two pieces of legislation that include $800 million in financial incentives to companies.

The first of the bills would provide state backing to $300 million in bonds for companies that agree to use the dollars to build new plants or convert existing plants to use clean coal technology. Such backing is considered critical to reducing interest costs, thereby helping companies initiate construction or improvement projects that might not otherwise would be started.

Since the price tag for a new plant is between $1.5 billion and $2 billion, a lower interest rate means savings of hundreds of thousands, or even millions, of dollars and could determine whether or not a project moves forward.

Providing state moral obligation backing to bonds would not impact the state budget.

A second bill would make it easier and more attractive for new or out of state companies to access existing state grants of up to $100 million per project that can be used to invest in building power plants that use technologies that burn Illinois coal.

The legislation would remove the current requirements that companies must provide four quarters of Illinois taxes before being eligible for such support. With this stipulation in place, out-of-state companies have little incentive to invest in the Illinois. The governor’s plan removes this obstacle to bringing new investment into the state.

The governor’s proposal would build upon successful legislative efforts undertaken in recent years by lawmakers, led by State Rep. Dan Reitz (D-Steelville).

In addition, the governor is also planning to convene a Coal Summit in the coming months.

Of the 24 plants in Illinois that currently burn coal, only three facilities, including Duck Creek, burn Illinois coal regularly as a result of clean coal scrubbing technology. Other sites include Southern Illinois Power Co op in Marion and City Water Light & Power Co. in Springfield.

During the past 25 years, Illinois’ communities that could previously count on revenues and economic activity associated with coal mining have suffered tremendously. Since 1978, downstate communities have seen coal mining jobs slashed from nearly 18,000 jobs to fewer than 4,000 today.

During that period, the number of operational mines in Illinois have dwindled from 71 to 20.

In contrast, if Blagojevich’s proposal is carried out, an estimated 20,000 new jobs could be created. The governor is setting the goal of building five new plants in the state that burn clean coal. For every 1,500 megawatt coal burning plant, approximately 4,000 jobs would be created, including positions in mining and construction, as well as jobs based at the power plants and at other sites.

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