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Archive for Saturday, March 6, 2004

Energy council to pursue new plant

Kansas among states interested in $1 billion FutureGen project

March 6, 2004

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It looks as though Kansas has a better chance to be the site of an innovative $1 billion power plant after the U.S. Department of Energy released a report Friday.

The report outlines that a consortium of 10 national companies -- including American Electric Power, Batelle and Peabody Energy -- has pledged $200 million to fund the 275-megawatt zero-emissions power plant called FutureGen.

Lee Allison, chairman of the State Energy Resources Coordination Council, said Friday that he previously thought utility companies in Kansas would need to raise $200 million to be considered for the project. But that has changed.

Now, all the state has to do is identify possible plant sites in Kansas for the consortium's consideration.

"It's a lot clearer now what they're looking for and what we need to do to have Kansas compete," Allison said.

Other states showing interest in the FutureGen plant are Texas, Illinois, West Virginia, North Dakota, North Carolina and Montana.

FutureGen would use new technology for coal-fired energy plants that eliminates carbon dioxide and hydrogen emissions into the atmosphere.

The timing of the report's release was ideal for the state council. Allison, who's also director of the Kansas Geological Survey in Lawrence, had already planned a council meeting Friday to discuss the plant. The report was released a few hours before the meeting.

After several presentations on the project, the council unanimously agreed to set up an exploratory group that would find potential sites for the plant in Kansas. The deadline for submitting site proposals to the national consortium is Oct. 1.

"We can't wait because the time frame is so short," Allison said.

The group will not know what the proposal must include until the national consortium signs a contract with the Energy Department. That is expected to happen sometime this spring, Allison said.

The council will look for sites in Kansas with existing infrastructure, Allison said. This could include sites close to oil fields where the carbon dioxide produced by the plant could be sequestered. Also, proximity to electrical lines that have capacity would help reduce costs. Because the plant will be experimental, keeping costs low will be a priority.

"The more of this infrastructure you can demonstrate, the better," Allison said.

Once it selects a site, the consortium will design, build and operate the plant.

State Rep. Tom Sloan, a Lawrence Republican, recommended considering existing Kansas power plants, which already have the costly infrastructure the new plant will require.

Sloan also mentioned the state's existing property-tax exemption for the construction of power plants. Texas already has offered $10 million in its effort to get the FutureGen project. Allison said a property tax exemption would be worth more than $10 million.

Another advantage Kansas has in securing the project is its close connections with the energy industry and energy regulators, Sloan said.

Landing the plant in Kansas could be an enormous boost for the state.

"It's not just a $1 billion project," Allison said. "You are now the lead in the future of energy production in the country."

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