"Our challenge is to find a way to use coal in an environmentally clean and friendly way," he told coal industry executives at the opening of a two-day conference on the mineral's future co-sponsored by the utility and the University of Kentucky.

Rogers said Cinergy needs 1,000 megawatts of new electric capacity to serve its 1.6 million customers in Ohio, Kentucky and Indiana, and a coal gasification plant will help fill that gap.

Last February, he announced Cinergy wanted to build a new plant using an environmentally friendly coal technology known as integrated gasification combined cycle. The process converts coal to a synthetic gas, which is then used to operate electric turbines.

Rogers confirmed Tuesday that Cinergy is in talks with General Electric Co., the leading maker of gas-fired turbines, and Bechtel Corp., the giant engineering and construction company.

Rogers said Cinergy would seek approval for the 600-megawatt plant. The company is leaning toward locating the plant near its Edwardsport, Ind., generating station north of Evansville. That plant now has three coal-fired generating units producing 160 megawatts of electricity.

At least two other Indiana sites, which Rogers declined to identify, are also under consideration.

Cinergy won't build the plant in Ohio because under the state's electric deregulation law, it doesn't have a means of recovering its cost, Rogers said.

The utility is one of the nation's largest coal consumers. It burns 30 million tons annually to produce 90 percent of its electricity.

Energy expert Daniel Yergin, conference keynote speaker, said with oil costing more than $50 a barrel and natural gas three times more expensive than a decade ago "the biggest economic risk facing the nation is energy."

Yergin said coal remains the backbone of U.S. electric generation, accounting for half of all electric generation.

Coal is also important to Kentucky's economy, Gov. Ernie Fletcher said in opening the conference. Coal is a $3.6 billion industry in the commonwealth, accounting for 17,000 jobs. Kentucky is the third-largest coal producer, behind Wyoming and West Virginia.

E-mail mboyer@enquirer.com