'Clean Coal' Power Plant In Works

Cinergy/PSI had previously announced it was making plans for a coal gasification project at a cost of $1.1 billion. If Cinergy/PSI goes through with the project, it would shut down the Edwardsport station, which generates about 160 megawatts.

A preliminary engineering study, to be conducted by General Electric Co. and Bechtel Corp., should be completed in a year. Vectren spokesman Mike Roeder said the company was not ready to discuss Vectren's share of the plan's cost.

Cinergy and Vectren would split the new plant's electrical generation capacity. Negotiations would determine how much power each company received from the plant, Roeder said.

In Southwest Indiana, Vectren has a total electrical capacity of 1,454 megawatts, 1,056 of which is generated by coal.

Roeder said Vectren has told the Indiana Utility Regulatory Commission several times in the past few years that the company will need to find additional sources of electricity for Southwestern Indiana after 2010.

"This is one of those possible solutions," Roeder said. "We continue to believe clean coal technology holds the best solution for the power generation needs of our customers."

John Blair, president of the environmental group Valley Watch, said he doubted the companies' claims that the region needed more electrical generation capacity.

"I'm not convinced it's needed," Blair said. "Don't we have enough power plants around here?"

In their statement, officials from both companies touted the benefits of coal gasification, saying it would provide a cleaner source of energy than conventional coal-fired plants.

The process - called integrated gasification combined cycle - removes some sulfur dioxide and other emissions from coal as it is turned into a gas, the companies said. Hot exhaust gases then heat steam, which drives a steam turbine generator.

According to Cinergy and Vectren, the process uses less water and has fewer emissions than conventional coal-fired plants using required pollution controls. The companies also said it costs less to remove mercury and carbon dioxide through the process.

"The environmental benefits have been demonstrated to be a positive for wherever these plants are located," Roeder said.

Blair said while the process might be cleaner than traditional coal-fired methods, any new power plants would "add to the mix" of pollutants in the area.

"Whatever benefits we're getting (from clean coal technology) are going to be negated," Blair said.

Earlier this year, Indiana Gov. Mitch Daniels signed legislation that provides economic incentives for the development of energy production facilities, including coal gasification plants.