The deal means AMP-Ohio will consume 23% of the project's output. It completes Peabody's partner agreements for Prairie State, of which it is retaining a 5% equity share.

"Participating in Prairie State is core to our strategy of securing a clean, low-cost, long-term supply of electricity to serve our 123 member communities," said AMP-Ohio president Marc Gerken.

AMP-Ohio serves a Midwest territory including Kentucky, Michigan, Ohio, Pennsylvania, Virginia and West Virginia.

The planned 16,000-MW Prairie State Energy Campus will be among the nation's cleanest coal-fired facilities, and will provide electricity for more than 1.7 million homes when it commences operation 2011 or 2012.

The new mine and power plant will create more than 500 permanent jobs and add annually almost $US125 million to the area's economy.

The project at its peak in the second quarter of 2010 will provide more than 2,300 jobs.

The Prairie State equity partner group now includes eight members with the AMP-Ohio addition; it joins the Illinois Municipal Electric Agency (IMEA), Indiana Municipal Power Agency (IMPA), Kentucky Municipal Power Agency (KMPA), Missouri Joint Municipal Electric Utility Commission (MJMEUC), Northern Illinois Municipal Power Agency (NIMPA), Prairie Power Inc., Southern Illinois Power Cooperative (SIPC) and Peabody Energy subsidiary Lively Grove Energy Partners.