Wednesday, March 11, 2009, 2:52pm CDT
$500M math error found in FutureGen cost
St. Louis Business Journal - by Kelsey Volkmann
The U.S. Energy Department killed a proposed coal-fueled experimental power plant in Mattoon, Ill., based on a half-billion-dollar miscalculation, a new report shows.
The DOE mistakenly said the plant had doubled in price to $1.8 billion, prompting the Bush administration to dump the project after investing $170 million in it, according to a report from the U.S. Government Accountability Office.
In dismissing the project, former Secretary of Energy Sam Bodman inaccurately compared 2005 constant dollars, or dollars that reflect the purchasing power of money in 2005, with inflated dollars that would have been spent over the following years, according to the report.
In constant 2005 dollars, the plant would cost $1.3 billion, an increase of about $370 million, or about 39 percent, over DOE’s estimate, rather than a near doubling of costs, according to government auditors.
U.S. Sen. Dick Durbin, D-Ill., has continued his push for the project, which could create 1,300 construction jobs and 150 permanent jobs.
“We always knew the DOE’s logic was flawed; now it turns out their math was wrong, too,” said Joe Shoemaker, a spokesman for Durbin.
Durbin and other lawmakers now hope that the project has received new life under the Obama administration and the new secretary of energy, Steven Chu. Durbin successfully pushed to include $1 billion in the federal stimulus package that could help pay for the plant.
In December, the FutureGen Alliance and Coles Together, the economic development organization for Coles County, bought a more than 400-acre site using nearly $3 million raised locally by Coles Together, along with other funds provided by the group’s 13 member companies, including St. Louis-based Peabody Energy Corp.
kvolkmann@bizjournals.com
