Cinergy prepares for carbon-constrained world

London (Platts)--23Nov2005

Although there has been much discussion in Congress about the effects of
reducing carbon dioxide, actual regulations or legislation have not been
forthcoming. But that hasn't stopped companies like Cinergy Corp. from
preparing for it in the future.

"We believe carbon regulation is coming," said John Stowell, Cinergy's vice
president for federal affairs, at the Dept. of Energy's Clean Coal and Power
Conference Tuesday.

Stowell said that with Cinergy being one of the largest emitters of CO2 in the
country, CO2 and greenhouse gas emissions were two of the toughest issues the
company faced.

"My company burns about 30 million tons of coal/year. Our challenge is to find
the best possible way to burn it in the most environmentally friendly way
possible," Stowell said.

According to Stowell, integrated gasification combined-cycle technology gives
Cinergy the opportunity to secure CO2 emissions cheaply. "We want to be able
to continue to use Midwest coal, and we believe this technology will help us
do so."

The company is evaluating the possibility of developing an IGCC facility at
its Edwardsport coal plant in southern Indiana. A decision is expected in 2006
(PCT 2/14).

Although capital costs for an IGCC facility can be a problem, Stowell was
confident that Cinergy could take advantage of the tax incentives in the
Energy Policy Act for building it.

"We've been emitting CO2 for years, but just as it has taken us a number of
years to build up those emissions, it well take us time to lower them,"
Stowell said. "We hope that any CO2 regulations would involve a gradual
process of lowering emissions so as not to hurt the economy."

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