The $US17.3 million shared-cost agreement includes the project’s preliminary design activities through to the end of this year. It also outlines that the Alliance and DOE will work with others to continue necessary tasks, including electric grid interconnect studies, obtaining environmental permits, identifying operational activities and vital milestones such as plant design updates and project cost estimates.

The two groups hope the completion of these activities will allow for a decision to progress FutureGen into final design and construction in early 2010.

“Today marks another milestone in the development of FutureGen. This agreement clearly signals our shared interest in realizing the potential of generating clean energy in Illinois,” the alliance’s chief executive officer, Michael Mudd, said Monday in Mattoon, the hometown-to-be of FutureGen.

“This milestone has been achieved thanks to the important support we continue to receive from [those] whose contributions have helped push this important project forward, as well as the continued commitment of the alliance member companies.”

Illinois Department of Commerce and Economic Opportunity director Warren Ribley said the agreement signified a “new beginning” for the work the alliance and DOE would do together to bring FutureGen to fruition.

“We will continue to do all we can on the state level to ensure this first-of-its-kind facility is built in Illinois,” he said.

The alliance noted to the Associated Press while in Mattoon that the groups were continuing to work to increase the number of involved alliance member companies from nine to 20. Mudd said there had been discussions with more than a dozen interested organizations.

"We're very optimistic that we're going to be able to get to that point or close," he said.

Current FutureGen Alliance members include Anglo American, BHP Billiton, the China Huaneng Group, Consol Energy, E ON US, Alpha Natural Resources, Luminant, Rio Tinto Energy America, Peabody Energy, PPL Corporation and Xstrata Coal. American Electric Power and Southern Company pulled out of the project in late June.

FutureGen backer and US Senator Dick Durbin inked a letter to the alliance and DOE Monday reiterating the importance of the agreement to bring the project into its next phase.

"I believe that we can address our nation's energy needs in a cleaner, more efficient way and that FutureGen is a critical component of how we can continue to use coal without causing more harm to the environment," he said.

The facility will use an integrated gasification combined cycle and capture and store 90% of carbon dioxide emissions expelled, sequestering it in the geological sandstone reservoirs of Mt Simon more than one mile underground.

Construction is anticipated to begin in 2010 with the plant fully operational by 2013, bringing an estimated 1300 construction jobs and 150 permanent jobs.

It will produce 275 megawatts of electricity, enough to power 150,000 homes, as well as hydrogen for fuel-cell technology.

At a total estimated cost of $2.4 billion, the DOE’s contribution will be $1.073 billion – $1 billion of which will come from Recovery Act funds.

The FutureGen Alliance of coal producers and power utilities will foot an anticipated $400-600 million of the bill, based on a $20-30 million contribution from 20 member companies.

The DOE said it would support the alliance in efforts to raise additional non-federal funds, including options, while there were other plans to hold a residual interests auction in the late fall once the plant’s research was complete. Funding will be phased out and released as National Environmental Policy Act reviews are completed and conditions met.