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June 6, 2006

$17 Million Grant Tops Aggressive Effort to Continue Illinois’ Leading Role in Developing Clean Coal Technologies

CHICAGO – Gov. Rod R. Blagojevich announced today that a $17 million direct grant from a clean coal technology fund tops off what is believed to be the nation’s most aggressive investment package to bring the $1 billion FutureGen coal-to-energy project to Illinois. After three years of extensive planning and preparation, Illinois submitted four potential locations for the state-of-the-art plant that met the rigorous site review standards established by the FutureGen Industrial Alliance.  The sites, which are located in Effingham, Marshall, Mattoon and Tuscola, are part of the state’s bid to host this state-of-the-art facility.  The Alliance will develop a short list of candidate sites this summer, and the final selection will be made sometime next year.

"After working aggressively for the past three years to land FutureGen, this is another strong statement of why we believe Illinois is the logical choice for this unprecedented initiative.  We have the coal, the geology and the strong support on the federal, state and local level for bringing the world’s cleanest coal plant to Illinois.  But we also understand that such an enormous public-private project requires additional financial support in order to get it off the ground.  The package we have put together is another clear indication of our willingness to invest in the cutting-edge technologies that will expand markets for Illinois coal, put more people to work and protect our environment," Gov. Blagojevich said.

The grant, which can be used for a wide range of project costs, is part of Gov. Blagojevich’s budget for Fiscal Year 2007 that was recently adopted by the Illinois General Assembly and signed by the Governor. 

Illinois is among the leading states competing for this coal plant of tomorrow, which will use coal gasification technology to produce 275 megawatts of electric power, as well as hydrogen for fuel cells and other industrial uses.  Because capture of carbon dioxide is critical to FutureGen’s success, analysts selected the final sites based on major factors related to the underlying geology, water availability and other technical requirements set forth by the FutureGen Industrial Alliance, which is developing the facility for the U.S. Department of Energy.

Since the two states share the same coal basin, Gov. Blagojevich and Indiana Gov. Mitch Daniels signed a Memorandum of Understanding in December stating that Illinois’ strong financial support for coal development, as well as its appealing geologic features, make the state the ideal host for the federally supported project, while Illinois supports carbon dioxide sequestration projects related to FutureGen in Indiana. 

"It was a rigorous process to qualify a site under the criteria established by the FutureGen Alliance.  We are proud that four different Illinois locations seem to have met that test, which is more than any other state, and that we are moving forward with proposals that offer some variety to the Alliance as it refines its site demands.  Illinois is sitting on a vast natural resource, with coal reserves that can produce more energy than the oil reserves of Saudi Arabia.  But to take full advantage of this resource, we must focus on the development of clean coal technology, particularly coal gasification, which is exactly what we are doing here in Illinois and why landing FutureGen is so critical to our efforts," Illinois Department of Commerce and Economic Opportunity Director Jack Lavin said. 

In addition to unwavering community support, local sponsors are providing additional assistance to the Alliance that range from property and sales tax abatements to site donations and/or land options designed for facility expansion or the location of FutureGen-related businesses.

State support, in addition to the $17 million grant from the Coal Development Fund, includes an estimated $15 million sales tax exemption on materials and equipment through local Enterprise Zones. Additional project-related funding is available through the Illinois Coal Competitiveness Program, the Illinois Clean Coal Institute and the public-private partnership Clean Coal Review Board.

Additionally, there is $50 million set aside by the Illinois Finance Authority for below-market-rate loans to the Alliance.

Other states bidding for FutureGen are Ohio, Texas, Kentucky, West Virginia, North Dakota and Wyoming.  Ohio and Texas each submitted two sites for consideration.  The others each submitted a single site. Members of the FutureGen Alliance represent the largest energy companies in the United States, plus a major energy company in China and the nation of India.  Among its major goals, FutureGen seeks to show how carbon dioxide from the process of coal gasification can be injected into and stored harmlessly in deep underground formations of rock, sand and salt water.


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