Kentucky has already committed $2.4 million to coal plants

FRANKFORT, Ky. (AP) -- The state has committed at least $2.4 million to attract two coal conversion plants to Kentucky.

That includes $400,000 to Peabody Energy to conduct a feasibility study on a $3 billion coal-to-liquid fuel plant near Sturgis, in Union County, and a $2 million to help EnviRes LLC develop technology in the Ashland area to gasify coal, biomass and other carbon-bearing materials.

Fletcher has said repeatedly that Kentucky would not even be considered for such projects without tax incentives that he is proposing for a special legislative session, tentatively scheduled to begin next week. But Democratic leaders in the House have taken the position that the issue can be dealt with during next year's regular session and that a special session is unnecessary.

The special session would cost about $60,000 a day.

The Peabody feasibility study isn't even expected to be completed until April 2008, when next year's session would be ending.

House Speaker Jody Richards, D-Bowling Green, said Wednesday that the contracts are further evidence that a special session to pass tax incentives for such companies is not needed.

"Those companies are already very interested in Kentucky, obviously, and the contracts show that there's no need for a special session to attract these companies to Kentucky," he said. "They are considering us; there's no question about it."

Sen. Bob Stivers, R-Manchester, said the state money directed to the two proposed projects is evidence that a special session is needed.

"If there is this type of interest, we don't want it to wane because we don't have incentive packages that are comparable to Illinois, Indiana, Ohio and West Virginia," he said.

Fletcher's office said in a statement that "the special session is focused on generating economic development, creating high-paying jobs and attracting a $3 billion alternative-fuels facility to Kentucky."