The agency sent a letter to the companies saying that it will formally withdraw from the FutureGen project. The companies are collectively known as the FutureGen Alliance.
"The letter sets in motion the final administrative steps to be taken under the cost-shared Cooperative Agreement between the Department of Energy and the FutureGen (Alliance)," Energy Department spokeswoman Angela Hill said in an e-mailed statement.
The letter from Energy Secretary Samuel Bodman, a copy of which was obtained by The Associated Press, says little other than that the DOE plans to work with the alliance to close out the partnership.
News of the Energy Department's formal withdrawal was expected, according to politicians who've worked to keep the project alive since the agency said in January that it didn't want to build the plant in Mattoon. The department said the project's cost was too high.
Lawmakers said they would try to put some funding for the project in the federal budget and revive it under the next president.
"In just a few months, this administration will be packing up and leaving town," Sen. Dick Durbin, an Illinois Democrat, said in a statement. "I am going to be here waiting for the next administration to make good on the federal government's commitment to move forward with this important project."
FutureGen Alliance spokesman Lawrence Pacheco echoed those sentiments.
"The Alliance remains committed to working with its champions in the House and the Senate on a legislative solution to keep FutureGen at Mattoon alive until the next administration," he said. "If the world and this country want to address carbon emissions, we will need carbon capture and sequestration technology. FuturGen at Mattoon is the only facility in the world in the planning process which can achieve that."
Durbin and other members of the Illinois delegation have tried unsuccessfully in recent weeks to pressure the DOE to keep the project afloat.
FutureGen was kicked off by President Bush in 2003 as a way to prove that coal could be used as a relatively clean way to generate power. Carbon dioxide from the power plant would be trapped and permanently stored underground.
The power and coal companies picked Mattoon for the plant in December over one other potential site in Illinois and two in Texas.
But almost immediately the Energy Department objected, saying the costs of the project had nearly doubled to $1.8 billion.
The DOE said instead it planned to start over, with plans to help pay for several clean-coal projects around the country. The agency plans to seek proposals for those projects in the next few weeks, Hill said.
But Illinois politicians like Durbin and Rep. Tim Johnson have long believed politics and President Bush's Texas roots were behind the decision to scrap FutureGen in Mattoon.
"It is still not clear why DOE abandoned this project only after Mattoon, Illinois was selected," said Johnson, an Urbana Republican.
Economic planners in Mattoon say they haven't given up and have plans to buy the site originally selected for the plant. And a seismic survey of the land, a final check of its suitability for carbon storage, is planned for next week, said Angela Griffin of the local economic development group Coles Together.
"It really doesn't change things for us," she said. "Everyone, including the alliance member companies, (was) expecting this. There have been contingency plans in place to keep this thing moving forward."