MATTOON - A consortium of the world's largest mining and power companies chose Mattoon over three other cities to host FutureGen, a $1.75 billion experimental coal-fueled power plant that aims to prove that the nation's most abundant fossil fuel can be used more cleanly.

The mood in Mattoon was euphoric after the announcement came about 9:15 a.m.

"How could you ask for anything more wonderful for Mattoon?" said Linda Cloyd as she taped a poster to the front door of the Apostolic Center of Mattoon. The former theater hosted a pep rally attended by Gov. Rod Blogojevich and other state officials and hundreds of local boosters of the project.

"We have been praying for a long time for FutureGen to come here," Cloyd said. "We've had a group on it."

The project offers the community the promise of 1,300 construction jobs, 150 plant operation positions and a share of the anticipated 1,200 jobs created by FutureGen-related business in coming years.

But celebration of the milestone was muted elsewhere by looming concerns about rising costs and a dispute between the project's partners that cast doubt about when or if it gets built.

The price tag for FutureGen has nearly doubled since the project was proposed in 2003 by the U.S. Department of Energy, which has agreed to pay at least $1.1 billion of the cost. Work is behind the schedule laid out 4½ years ago.

Most recently, the FutureGen Industrial Alliance, the group building the plant, had a public falling out with the government officials over the timing of the site selection announcement.

Energy Department officials told the alliance in a letter last week that announcing a winning site so soon was "inadvisable," and no government officials attended Tuesday's news conference in Washington, D.C.

James Slutz, an acting deputy assistant secretary for fossil energy, pointed out in a statement issued hours later that FutureGen remained a "cornerstone" of President Bush's vision for cleaner coal technologies. At the same time, he warned that "projected cost overruns require an assessment" of the project's design.

A spending bill approved Monday by the House includes $75 million for FutureGen. That's $33 million less than supporters such as Reps. Jerry Costello, D-Belleville, and John Shimkus, R-Collinsville, had sought. The bill is expected to be approved by the Senate this week.

Sen. Dick Durbin, D-Ill., called the funding difference "an indication of the challenges we face."

"It's going to be a struggle from day one" to get the needed funding, said Durbin, who as the Senate's No. 2 leader and a member of the appropriations committee has significant sway over federal spending decisions.

The chief executive of the alliance, Michael J. Mudd, said he hoped Congress would make up the funding difference.

The FutureGen alliance spent 20 months evaluating potential sites before settling on Mattoon. Other finalists included Tuscola, a 25-mile trip north on Interstate 57, and locations near the Texas cities of Jewett and Odessa.

Wrangling in Washington didn't dampen enthusiasm in Central Illinois.

Early Christmas gift

"I've got to think this is a pretty good Christmas gift," said Gov. Rod Blagojevich, who flew to Mattoon Tuesday for the rally.

"I know this is the biggest economic development to hit this area in decades," he said. "It's great to be governor when great things like this happen."

FutureGen supporters say the benefits of finding cleaner ways to use coal justify the technical and financial risks. Doing so, they say, has become a priority because of growing concern about rising levels of carbon dioxide, the greenhouse gas most closely linked to global warming.

Making money isn't the goal of FutureGen; it's to prove the feasibility of producing electricity and hydrogen from coal with near-zero emissions and to reduce the cost and risks of new technologies so they can be deployed at commercial-scale projects.

As a research project, FutureGen will be just a fraction of the size of a typical coal-fired power plant. But it will also be much cleaner because of the process used to generate electricity.

Instead of burning coal, the sooty, black rock will be converted to a synthetic gas to strip out pollutants, including carbon dioxide, which will be injected under pressure into the pores of a rock formation known as the Mount Simon Sandstone that sits more than a mile below ground.

The Mattoon site was selected because it met dozens of criteria, including access to rail, water and electric transmission lines that would connect the plant to the regional power grid.

Mudd, the FutureGen alliance CEO, said politics played no part in the decision.

Kevin McDermott and Herb Meeker contributed to this report.