The Illinois Environmental Protection Agency (IEPA) has denied a permit request by Aurora, Ill.-based Power Holdings to construct a power plant in Jefferson County that would convert coal to synthetic gas, citing insufficient details about emissions and air-quality analysis relating to the completed facility, as well as failure to justify the project's delay.

The decision marks the latest setback for the $2-billion project, which Power Holdings first proposed in 2006. Although Illinois lawmakers in 2011 approved a measure compelling state utilities to purchase synthetic natural gas produced by the plant, Power Holdings in May cited difficulties attracting investors to the project.

“Given the current unprecedented low price for natural gas, Power Holdings is finding capital markets hesitant to provide funding,” the company indicated in a statement.

Earlier this year, Power Holdings applied for an extension of the project's construction permit, which expired in February. According to IEPA, the request did not address new or revised standards and operations requirements for utility plants and boilers, nor did  it  demonstrate Best Available Control Technologies for emissions, greenhouse gases and particulate matter.

Although IEPA indicated that Power Holdings can reapply for a construction permit, the process would involve new rounds of public reviews and appeals. Critics, including residents of Jefferson County, expressed concern about the project, including its economic and environmental impacts.

According to its web site,  Power Holdings intended to break ground on the plant this year, subject it to testing by the end of 2013 and have it fully operational in 2014.

When the project was first proposed, Power Holdings estimated it would create 1,500 construction jobs and 700 permanent positions.