INDIANAPOLIS (December 14, 2005) ? Governor Mitch Daniels and Illinois Governor Rod R. Blagojevich boosted the region?s chances to win the $1 billion FutureGen project. Both have signed an agreement through which Indiana and Illinois will make a united bid to attract the breakthrough clean-coal development to the Illinois Coal Basin.

The Memorandum of Understanding between Illinois and Indiana says that strong financial support and appealing geographic and geologic features make the two states the ideal hosts for the federally supported FutureGen project, which is the near-zero emissions power plant that will also produce hydrogen fuel and allow capture and possible use of carbon-dioxide.

?We have all the elements that are needed for this project: the natural resources, ideal geologic structure, and a commitment to clean coal as American?s ace in the energy hole,? said Daniels.

?This agreement shows vision in creating a regional, bipartisan alliance that pools our two states? assets to realize our common goal of developing our abundant coal reserves in an environmentally responsible manner,? Blagojevich said. ?We share a coal basin that spans the Wabash and Ohio rivers, and we share a commitment to unlocking the full energy potential of Illinois Basin coal through coal gasification technology. The only way to make coal king again is to make coal clean, which is what we are both committed to doing.?

Through the agreement, Indiana supports Illinois? application to site the state-of-the-art, public-private electric generating facility in Illinois, and Illinois supports carbon-dioxide sequestration projects related to FutureGen in Indiana. An ongoing collaboration over the past two years will continue to develop sequestration in Indiana, Illinois and Kentucky to ensure that FutureGen can meet its near-zero emissions goal.

The FutureGen Industrial Alliance, an industrial consortium, was recently designated by the U.S. Department of Energy (DOE) to choose a site for what is being described as the coal-fueled power plant of tomorrow. The Alliance also will select technology for the project, hire a design-construction team to the facility and operate it when it is complete. Coal represents more than 85 percent of U.S. energy reserves and fuels 50 percent of U.S. electric production. Throughout the world, coal use has grown more than five times faster than projected in the past three years.

The Alliance and DOE will launch the site selection effort in 2006, with an aggressive schedule to start construction within three years and have the plant in operation by 2012. Public and private entities in 14 states have expressed interest in hosting or participating in the project, according to the Alliance, which is a non-profit coalition of the world's largest coal and energy companies. Its members have committed more than $250 million to project development. The federal government would invest about $700 million. A multi-year project, FutureGen?s first budget period runs through Jan. 31, 2007. First-year spending of $10.2 million will focus on establishing the configuration and cost of the facility and developing a short list of potential sites.

Members of the FutureGen Alliance are American Electric Power; BHP Billiton; the China Huaneng Group; CONSOL Energy Inc.; Foundation Coal; Kennecott Energy, a member of the Rio Tinto Group; Peabody Energy and Southern Company. The not-for-profit Battelle research and development firm is the Alliance coordinator.

Media contacts:

Jane Jankowski, Office of the Governor, 317/232-1622, jjankowski@gov.in.gov

Andrew Ross, Illinois Office of the Governor, 312/814-8193, Andrew.Ross@illinois.gov