Jan 12 - McClatchy-Tribune Regional News - Elizabeth Souder The Dallas Morning News



The clean coal debate lives.

The Texas Legislature this session will revive the issue by considering whether to give tax breaks to companies building cleaner, coal-fired power plants that capture greenhouse gases.

The bill, filed by Rep. Phil King, R-Weatherford, is designed to make integrated gasification combined cycle power plants, or IGCC, economically viable by waiving up to $100 million in franchise taxes per plant, along with other incentives. The incentives are only for IGCC plants that capture and store at least 60 percent of their carbon dioxide emissions.

"People are afraid, the industry's afraid, to go and try to build a clean coal plant. I call it the prototype penalty," King said.

New, prototype technology often costs more than older technology, so some developers shy away from the risk and cost of adopting something new. IGCC with carbon capture can cost as much as 50 percent more than traditional coal-fired plants.

Sen. Kel Seliger, R-Amarillo, will sponsor the bill in the senate. He represents Odessa, one of the sites proposed to host the defunct federal clean coal project called FutureGen.

The bill targets an IGCC plant proposed by Summit Power, which hired former Dallas mayor Laura Miller to help get it built. Summit wants to build at the Odessa site, but Miller said the company needs government incentives to make a business case for the plant.

"The reason there are legislators that are interested in this kind of plant is that Texas has the opportunity to be ground zero in the country for carbon capture and sequestration," Miller said. She will appear at a press conference in Austin on Thursday in support of the bill.

Other companies with IGCC proposals could also apply for the tax credit.

NRG Energy has applied for an air permit for an IGCC plant in South Texas. The company has said it needs government incentives to make the plant profitable.

And Energy Future Holdings' Luminant generation business has said it is considering building IGCC, but hasn't offered any proposals.

"This type of policy proposal is a solid first step by the Legislature," said Luminant's senior vice president of public affairs, Phil Wilson.

The bill offers three incentives. The plant developer gets up to $100 million in franchise tax credit.

Also, the University of Texas' Bureau of Economic Geology will monitor the sites where the carbon dioxide is stored to ensure that the greenhouse gas remains underground.

Third, any oil company that will take the carbon dioxide from the plant and use it for enhanced oil recovery gets a tax incentive.

A number of oil companies around the state buy naturally-occurring carbon dioxide produced out of state. The carbon dioxide is piped in, and injected into aging wells to bring up more oil.

IGCC plants are called "clean coal" because the plant turns the fuel into a gas. Burning the gas emits less pollution than burning the coal outright. The process also allows the plant to capture carbon dioxide more easily than a traditional coal plant.

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