Dorn: County Will Buy Title to Power Plant for $1
MOUNDSVILLE – In exchange for purchasing Moundsville Power LLC’s planned $615 million natural gas power plant upon its completion, Marshall County commissioners would collect about $31 million in lease payments over 30 years, under the proposed agreement.
Andrew Dorn, managing partner with Buffalo, N.Y-based private developer Moundsville Power, believes this would be a worthwhile investment for the county because commissioners would only pay $1 to acquire the facility.
“The county will take title for $1, but they will have the title in name only,” Dorn said Monday. “There is very little risk involved. This plant is going to run.”
If Moundsville Power is able to proceed with building the 549-megawatt plant on a 37.5-acre piece of property along the Ohio River, the Payment in Lieu of Taxes plan shows the firm would pay the county commission as much as $39.29 million to lease the property over 30 year.
These payments are in addition to the $1 million lump sum the company would need to give commissioners once the plant would begin operating.
However, the company will receive an annual discount of $10,000 for every one of the 30 full-time jobs it maintains at the facility, reducing the likely total payment to the county over 30 years by $9 million.
Although commissioners Don Mason, Brian Schambach and Bob Miller gave preliminary approval to this agreement, they emphasize they have not yet signed an actual lease with the Moundsville Power. Therefore, any discussion of lease terms is merely preliminary.
“They still need to work through several issues, including insurance and indemnification,” Schambach said.
Dorn also said the electricity generated at the potential plant would not be any direct replacement for the soon-to-close American Electric Power Kammer Plant. He said the PJM Interconnection grid needs more power in 13 states throughout the eastern U.S.
“Certainly, (natural gas) will compete with coal to sell electricity,” Dorn said. “We cannot stop burning coal to generate electricity. If we did, the lights would go out.”
Dorn also said the $615 million price tag will be met with private financing. He said his proposed facility will be a combined-cycle plant that will use natural gas to run one of its turbines, while using the exhaust heat from this process to drive an additional steam turbine.
Public Service Commission of West Virginia spokeswoman Susan Small said Moundsville Power filed a notice to site the plant. West Virginia Department of Environmental Protection spokeswoman Kelley J. Gillenwater said the firm applied for a New Source Review permit to assure compliance with clean air standards on Oct. 7.
“We are still working through some permitting issues. We have been working on this now for 18 months,” Dorn said. “It is a monster of a project.”
As he hopes to begin building the facility in early 2015, Dorn said surging electricity demands throughout the Northeast – combined with the presence of relatively cheap Marcellus and Utica shale natural gas – could eventually lead to similar facilities lining along the Ohio River.
“There is a ton of gas and a real need to electricity,” he added.