Air permit for Peabody's Kentucky plant is questioned

LOUISVILLE, KENTUCKY - A Kentucky hearing officer said plans for a Peabody Energy Corp. coal-fired power plant in the western part of the state should be re-examined to identify ways to cut emissions and minimize the environmental impact.

Janet C. Thompson of Kentucky's Office of Administrative Hearings recommended in a report August 9 that an air permit issued to Peabody in 2002 be sent back to the state's Division of Air Quality for further evaluation.

The 400-page report specifically urged further study of ways to minimize pollutants by using new technology or coal with a lower sulfur content. Additional analysis of how the plant would affect visibility, soil and vegetation also was recommended.

The Thoroughbred Generating Station, about 125 miles southwest of Louisville near Central City, is being watched closely in Illinois and Missouri because of its similarity to a sister plant that Peabody wants to build near Lively Grove, Ill.

Peabody has 14 days to respond to Thompson's report. LaJuana S. Wilcher, Kentucky's environmental and public protection cabinet secretary, ultimately will decide whether the final permit is issued for the Thoroughbred Generating Station.

St. Louis-based Peabody, the nation's largest coal producer, declined specifically to address points made in the report until a formal response is filed.

"Each step in this process moves us closer to resolution and gives us clarity," company spokeswoman Beth Sutton said. "We look forward to completing the review and advancing the development."

Peabody said separately on Wednesday that the proposed 1,500- megawatt Prairie State Generating Station received a final mine permit from the Illinois Department of Natural Resources. Unlike most coal plants, the Prairie State and Thoroughbred plants would be fueled with coal from adjacent mines.

Peabody received an air permit for the $2 billion Prairie State plant earlier this year. The Sierra Club and other environmental groups in June appealed the decision to the U.S. Environmental Appeals Board.

A final decision is still months away, but Sierra Club officials said recommendations by the Kentucky hearing go "to the heart" of their appeal in Illinois.

The Kentucky and Illinois plants "are two peas in a pod," said Bruce Nilles, Midwest spokesman for the Sierra Club. "They're identical, in essence. They both use outdated pollution-control technology."

However, Peabody officials insist the plants in Illinois and Kentucky would use the "best available" pollution-control technology.

Besides being similar in size and design, the Prairie State and Thoroughbred projects must clear the same regulatory and financial hurdles before construction begins. Those include securing all necessary permits, finding a buyer for most of the electricity output and finding an operator to run them.

Each plant is expected to take about four years to build, making it unlikely either would be running before 2010.

Peabody wanted to begin construction sooner but said the lengthy appeals processes won't dissuade it from pressing forward.

"Each passing day of delay adds to the need for and the value of projects like Thoroughbred and Prairie State," Sutton said.