CHARLESTON, W.Va. -- Federal officials have quietly pulled the plug on funding for construction of the proposed Western Greenbrier Co-Generation plant.

U.S. Department of Energy officials now list the $416 million facility as "discontinued."

Developers have for more than five years struggled to come up with private money to match DOE funds, and environmental groups have complained that the project would pollute local air and water.

DOE spent more than $8 million on project planning, and the West Virginia Economic Development Authority lost $3 million in a loan guarantee approved in 2004 by the Wise administration.

"It's good that the federal government finally came to its senses," said Joe Lovett, director of the Lewisburg-based Appalachian Center for the Economy and the Environment, which challenged plant permits.

"I think the local developers of the project were well-intentioned, but wrong, because the plant would have had significant negative consequences for the environment of the county," Lovett said. "And the economy of the county is significantly based on tourism, and it would have been a mistake to put a coal-fired power plant here."

DOE dropped the project in mid-June, less than two months after they formally approved a loan of up to $107.5 million, according to federal records.

The DOE action also came just a month after developers had obtained private funding to help complete a critical engineering report for other private financiers.

DOE had never publicly announced the move, but agency officials confirmed the action in an e-mail statement Wednesday.

CHARLESTON, W.Va. -- Federal officials have quietly pulled the plug on funding for construction of the proposed Western Greenbrier Co-Generation plant.

U.S. Department of Energy officials now list the $416 million facility as "discontinued."

Developers have for more than five years struggled to come up with private money to match DOE funds, and environmental groups have complained that the project would pollute local air and water.

DOE spent more than $8 million on project planning, and the West Virginia Economic Development Authority lost $3 million in a loan guarantee approved in 2004 by the Wise administration.

"It's good that the federal government finally came to its senses," said Joe Lovett, director of the Lewisburg-based Appalachian Center for the Economy and the Environment, which challenged plant permits.

"I think the local developers of the project were well-intentioned, but wrong, because the plant would have had significant negative consequences for the environment of the county," Lovett said. "And the economy of the county is significantly based on tourism, and it would have been a mistake to put a coal-fired power plant here."

DOE dropped the project in mid-June, less than two months after they formally approved a loan of up to $107.5 million, according to federal records.

The DOE action also came just a month after developers had obtained private funding to help complete a critical engineering report for other private financiers.

DOE had never publicly announced the move, but agency officials confirmed the action in an e-mail statement Wednesday.

Joe Culver, a DOE media spokesman, said in the statement, "it became clear that the ultimate success of the project was not likely."

Wayne Brown, a spokesman for Western Greenbrier, said that a reporter's phone call was the first he heard of the DOE decision.

"Well, that's news to me," Brown said. He added that the project's future seemed dim, given the lack of DOE money.

"We would have to sit down and think about that," Brown said. "We certainly were counting on the Department of Energy."

When DOE granted its initial approval in late April, the agency said, "Without the funding, DOE assumes the project would be canceled."

Western Greenbrier had hoped to build the plant near Rainelle. It would burn coal and coal waste, helping to clean up a nearby gob pile at Anjean, developers said. Western Greenbrier is owned by the towns of Rainelle, Rupert and Quinwood.

Originally, the 85-megawatt plant was expected to cost $215 million, and developers hoped to get half of that in loans from the DOE's clean coal program. But costs skyrocketed to $416 million, and developers have said that they were facing financial problems.

Earlier this year, one local bank refused to continue extending payback dates for Western Greenbrier, and the state EDA had to pay the $3 million of the loan it guaranteed, said David Warner, director of the EDA.

To read a study of the power plant project: http://www.netl.doe.gov/technologies/coalpower/cctc/EIS/eis_wgreenbrier.html

Reach Ken Ward Jr. at kw...@wvgazette.com or 348-1702.