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11 October 2006 -- CMS Enterprises, a subsidiary of CMS Energy, has signed agreements with Peabody Energy to co-develop the Prairie State Energy Campus, a 1,600-MW power plant and coal mine in southern Illinois.
"Selecting CMS Enterprises as operator marks significant progress in our development process, allowing Prairie State to move forward with a recognized leader to deliver clean, low-cost energy for the region," said Peabody President of Generation and Btu Conversion Rick A. Bowen.
CMS Enterprises and Peabody Energy will co-develop and each own 15 percent of Prairie State indirectly through a jointly owned limited liability company. The remainder is expected to be owned by a number of Midwest municipal utilities and electric cooperatives with commitments already secured for 53 percent of the ownership.
CMS Enterprises will serve as lead developer, construction manager and operator of the mine-mouth power plant. Peabody Energy -- the largest private sector coal producer in the world -- will be lead developer of the Lively Grove Mine that will fuel the power plant for an estimated 30 years. The plant and mine site is about 40 miles southeast of St. Louis, near Lively Grove. Ill.
Financial close of the project is contingent upon Peabody and CMS Enterprises being able to secure: - Non-recourse project financing
- An engineering, procurement, and construction contract for the power plant
- Long-term power purchase agreements for a substantial portion of CMS Enterprises' and Peabody Energy's share of the project's output
CMS Enterprises and Peabody Energy are optimistic that those conditions can be met for a financial close. An engineering, procurement and construction contract for the power plant is being negotiated. The plant cost is estimated to be in excess of $2.5 billion. CMS Enterprises expects to make a long-term equity investment of about $200 million at the completion of construction.
Construction of the first 800-MW generating unit is expected to take about four years to complete and the second 800-MW unit will be completed shortly afterward.
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