Marshall County plans for natural gas combined cycle power plant - Beckley, Bluefield & Lewisburg News, Weather, Sports

Marshall County plans for natural gas combined cycle power plant

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From Staff Reports

Members of the Marshall County Commission approved a resolution April 22 regarding a tax agreement with Moundsville Power LLC to advance plans for a $615 million natural gas combined cycle power plant.

Moundsville Power LLC is a single purpose development company formed by a group of Western New York businessmen with experience in construction, development, finance and energy, according to information from Moundsville Power. The group is planning to construct a natural gas combined cycle power plant with a nameplate capacity of 549 megawatts on a 37.5 acre parcel of property south of Moundsville currently owned by Honeywell International. The location is next to a Williams Energy fractionator and commonly known as the Allied Chemical site.

The project is expected to be a $615 million plant that will run as a base load facility generating power 24 hours per day, based on information provided by the Marshall County Commission. The power is expected to be sold into the PJM Interconnection, a wholesale electricity transmission organization. Moundsville Power cited an economic impact study from Tom Witt of Economics LLC in Morgantown that estimates more than 400 construction jobs will be created during the plant’s estimated 30-month construction period.

Moundsville Power Spokesman Andrew W. Dorn Jr. said union craft labor will build the plant and it will be managed under a National Maintenance Agreement.

The project still needs to obtain state and federal approvals to develop and build the plant, but organizers anticipate construction to begin in 2015 and operations to begin by 2018. An application for an air quality permit with the West Virginia Department of Environmental Protection was filed Oct. 7, 2013 by Moundsville Power LLC, but it has yet to be approved.

According to a December 2012 briefing from the U.S. Environmental Protection Agency, both Honeywell and Olin Corporation had been performing various cleanup activities at the site under the oversight of the EPA. Those activities included constructing a hazardous waste landfill and installing a soil vapor extraction system. According to the EPA, Allied Signal operated the site from 1953 until 1980. In 1980, the southern portion of the site, known as the South Plant, was sold to LCP Chemicals-West Virginia which underwent a name change in 1990 to Hanlin Chemicals-West Virginia. Allied Signal sold the northeast portion of its facility to Olin in 1981. Allied Signal kept the northwest portion of the site called Allied Park. Allied Signal Inc. also underwent a name change to become known as Honeywell International. The North Plant and the South Plant had “distinctly different chemical processes,” according to the EPA, with vastly different chemicals used at each.

“This project would not be possible without the vision, leadership and desire of Honeywell to return as much of this site as possible to a viable economic use,” Dorn said. “Honeywell has been an indispensable partner in the development of the site, providing significant financial and engineering support to move the project forward.”

The project is being dubbed the first “downstream” project proposed to utilize natural gas produced in Marshall County and throughout the Upper Ohio Valley.

Don Rigby, executive director of the Regional Economic Development Partnership said his organization had been working with the Moundsville Power development team for more than a year “and will continue to provide assistance to help them as they work through the project’s development.

The organization, Moundsville Power LLC, filed for a West Virginia business license and became effective March 11, 2013, according to information from the West Virginia Secretary of State’s office.

The agreement described by the commission as a step along in the approval process for the project, is a PILOT or Payment in Lieu of Tax Agreement. The PILOT Agreement sets a fixed amount of property taxes to be paid on the project for 30 years and allows developers to seek financing with a predetermined property tax liability. The $4.2 million in PILOT payments will stay the same under the agreement, even if future levy rates are reduced. The agreement still requires approval from the Marshall County Board of Education. PILOT payments generated by the project would be treated the same as property tax payments and would be distributed to both Marshall County Schools and the commission.

The Marshall County Commission also must consider a resolution for a lease for the project, to work in conjunction with the PILOT agreement. KeyBanc Capital Markets Inc., based in Cleveland, will act as the exclusive project finance advisor.

Moundsville Power will contract with a consortium made up of CH2M Hill and General Electric. CH2M is expected to build the plant and provide construction and operating guarantees and GE is expected to provide the natural gas turbines and power island equipment as well as a long-term contractual services agreement to ensure the efficient operation of the power project.

The plant plans to use GE 7.04 gas turbines in a two-by-one-configuration, according to Moundsville Power, explaining that the heat and rotational energy produced by the combustion of natural gas in a gas turbine will produce electricity. In turn, the exhaust heat from that process will be used to produce steam which then will drive a steam turbine to produce additional electricity without the use of additional natural gas, keeping the plant fuel-efficient.