Peabody to build power plant, coal mine in Southern Illinois

Peabody Energy Corp. will build a $2 billion combination coal mine and power plant in Washington County, which will create about 1,500 construction jobs and up to 500 permanent jobs in an area hit hard by the decline of the state's coal industry.

The 1,500-megawatt "mine-mouth" plant will burn 6 million tons of Illinois coal annually, said Sen. Dave Luechtefeld, R-Okawville, on Oct. 16. Construction could begin within one year.

The project would be the first major one in the state since lawmakers passed a package of grants, tax breaks and other incentives in June aimed at boosting the state's coal industry, which was battered in the 1990s when the Clean Air Act made local coal too expensive to burn cleanly.

The area is one of those hardest hit along Illinois' considerable coal seam, said Taylor Pensoneau, president of the Illinois Coal Association.

Mine-mouth power plants consist of power generators located near the coal mines that feed them. Such plants are cost effective because the coal that fires them does not have to be transported far.

St. Louis-based Peabody, the largest coal producer in the world, will start a power subsidiary of its own instead of partnering with a separate company to run the generator, Luechtefeld said.

Peabody owns 2.2 billion tons of coal reserves in Southern Illinois and in 2000 mined 182 million tons of coal nationwide.