POMEROY — Local officials and American Electric Power are holding out hope that a new energy bill passed by the Ohio Senate and now before the Ohio House will address cost recovery issues related to a proposed $2 billion clean-coal power plant for Meigs County.

AEP, meanwhile, has said it will continue to pursue Integrated Gasification Combined Cycle technology in those states offering “conducive investment climates.”

However, Jeff Rennie of AEP’s Corporate Communications office said Monday the chances of the project ultimately being built in Meigs County or anywhere in Ohio depends on one issue: AEP’s ability to recover costs associated with the plant from its customers.

On Friday, the Ohio Supreme Court voted unanimously to reverse a decision by the Public Utilities Commission of Ohio that allowed AEP to recover nearly $24 million in research and design costs associated with the proposed IGCC plant. Those costs have already been charged to customers, but the Supreme Court did not order the costs to be returned to AEP customers.

Rennie said the issue of returning the money to the customers who paid it is one of those issues remanded back to the PUCO for additional consideration.

Additional plans for the project have been on hold pending a disposition of the Supreme Court case. AEP was working with engineers to bring proposed construction costs down, and had delayed any additional cost recovery requests before the PUCO until the front-end engineering and design cost recovery issue was resolved.

Economic Development Director Perry Varnadoe said yesterday he is “no less optimistic” that the plant will be built here than he was before the Supreme Court decision, but he said the issue from a local development standpoint is not one of cost recovery, but of economic development.

“There are still some hurdles to overcome, but we emphasize that the issue for us is economic development,” Varnadoe said. “This is a proposed $2 billion project that will be of major importance not only to Meigs County and this region, but for the entire state.”

Varnadoe said he held discussions with AEP officials and state legislators yesterday to discuss the next steps in attracting the plant here. The next hope, he said, is that the energy bill proposed by Gov. Ted Strickland, passed by the Ohio Senate and now under consideration by the Ohio House of Representatives will make provisions that will allow AEP to recover costs.

Rennie agreed.

“AEP is hopeful that this energy bill, which is designed to govern how electric utilities operate, will encourage new generation facilities in the state,” Rennie said.

Rennie said AEP still prefers the site it owns in Lebanon Township for its first Ohio IGCC facility, but said it will only be built here if AEP can get approval to recover its costs.

AEP is ready to move forward on construction of a “twin” IGCC plant in Mason County, W.Va., since it received regulatory approval from the West Virginia Public Service Commission for construction of the plant.

“We are committed to IGCC generation technology, and will continue to puruse it in jurisdictions where there are conducive investment climates,” AEP’s utilities president, Robert Bowers said Friday. “We hope Ohio can resolve the path to move forward with new baseload generation, bringing this technology and the associated jobs to Ohio.”

IGCC technology converts coal into a gas that moves through pollutant-removal equipment before it is burned in a combined-cycle gas turbine to produce electricity. IGCC plants are considered more efficient and less costly in storing carbon underground.