The preparation of low-ash and low-sodium micronized low-rank coal (LRC) fuels for test firing in a gas-turbine combustor module is described in this report. Four subbituminous coals and one lignite were examined for their amenability to the preparation of high-quality powder and coal-water slurry fuels (CSF). The data base included the proximate, ultimate, ash composition, trace element, heating value, and free swelling index determinations and the slurry rheology for the raw coals and for the same coals after various physical separations, chemical treatments and hydrothermal processing. Eagle Butte subbituminous coal from the Powder River Basin was selected for preparation of ''available-quality''and ''improved-quality''micronized powder and slurry fuels for the combustion tests. This coal was cleaned in a dense-medium separator for preparation of available-quality fuels. Two advanced beneficiation steps were added for preparation of improved-quality fuels. The additional steps were (1) acid treatment to remove sodium and soluble ash minerals and (2) hydrothermal processing at 330/sup 0/C to improve the heating value and the rheology of the CSF. Twenty-four hundred pounds (dry basis) of minus 30-micrometer fuel were prepared for the combustion testing. A conceptual design was developed and costed for a 650,000 tpy improved-quality micronized CSF plant fueling 100 MW of gas-turbine generating capacity. The plant would be located adjacent to a mine in northeastern Wyoming. The capital construction cost for the plant was estimated to be $86.9 million and the operating cost for the plant (including amortization) was projected to be $4.55 per million Btu (HHV), FOB plant. The operating cost could be reduced to $3.22/MBtu if the plant were scaled for 500 MW of generating capacity instead of 100 MW. 19 refs., 12 figs., 31 tabs.