RED Looks for Green Light on Power Plant
MOUNDSVILLE – Over the past two years, about $25 million has gone into plans, studies and site work for the proposed Moundsville Power plant in Marshall County. All that time and money could hit the make-or-break point this week, as company officials and leaders from the Regional Economic Development Partnership will make a formal pitch at 9:30 a.m. Monday to county commissioners, in hopes of securing their support for the facility.
Monday’s meeting, according to Moundsville Power Managing Partner Andrew Dorn and RED Executive Director Don Rigby, will focus on the legal safeguards in place to protect Marshall County’s taxpayers, which are being asked to assume ownership of the plant after construction and lease it back to Moundsville Power to operate.
Rigby said this type of ownership setup is necessary under state law to allow the county to offer tax incentives such as a Payment in Lieu of Taxes, or PILOT, agreement, through which Moundsville Power would pay about $1 million annually to the county in lieu of a regular property tax payment.
If all goes as planned, Monday’s meeting could lead to a commission vote at 9:30 a.m. Tuesday on whether to accept the PILOT agreement and lease plan, which Moundsville Power says it needs to operate successfully. Both Monday’s and Tuesday’s meetings are open to the public.
“We feel we have done good background work on this. We have worked with attorneys and insurance consultants,” Moundsville Power Managing Partner Andrew Dorn said. “We are not going away easily.”
“We are going to bring everyone in to let the commissioners ask whatever questions they want to ask,” RED Executive Director Don Rigby added.
If Dorn and his company ultimately proceed, they plan to spend $615 million to build a natural gas power plant that would generate 549 megawatts of power. Moundsville Power would use about 100 million cubic feet of gas per day – about the daily production of three gas wells – to provide electricity that would be sold into the nation’s power grid.
The facility would be a “combined-cycle” plant that will use natural gas to run one of its turbines, while using the exhaust heat from the process to drive an additional steam turbine.
Dorn said the $615 million price tag would be met with private financing.
“What we are building is a facility that will bring living-wage jobs and long-term investment to Marshall County and the surrounding region,” Dorn said. “We also are creating an operation that demonstrates responsible use of West Virginia’s natural resources and produces electricity in an extremely clean manner.”
Dorn said locating in Moundsville makes sense for his company, as the site near Washington Lands is in the heart of the Marcellus Shale with processing plants nearby. But other natural gas-fired power plants are moving forward, such as the 829-megawatt Panda Power Funds plant in Lycoming County, Pa., and the reality is that these facilities can locate anywhere.
Dorn recently sent in Moundsville Power’s siting application, along with a $200,000 non-refundable fee, for consideration by the West Virginia Public Service Commission. He said his operation could be the start of a new power plant movement in the region.
“We would like to think other plants would follow our lead in realizing that Marshall County, and northern West Virginia, would be a good location for them,” he said.
Another positive for the plant is that it would be the first end-user of natural gas to build in the region, Rigby said.
“This would be the first downstream use for our local gas,” Rigby said of Moundsville Power. “And it supports local jobs.”
The PILOT/Lease Agreement
PILOT agreements have been part of West Virginia code since 1933, and are not uncommon – there currently are more than 20 being used, including one for the CertainTeed gypsum plant in Marshall County and one for the new Longview Power Plant in Monongalia County. Moundsville Power’s proposal, though, has split the Marshall County Commission, with Commissioner Bob Miller adamant against any type of county help while Commissioners Brian Schambach and Don Mason continue to weigh their options.
Both Mason and Schambach are open to the PILOT concept, though they have not committed to voting for it. Both men agree the CertainTeed PILOT, approved in 2008, has worked well.
One of the major concerns with the Moundsville Power project is potential liability for the county. All three commissioners agree that having liability with the plant would be a problem.
“Pretty much, we don’t want to be liable for any of this,” Schambach said of the project.
Miller, along with the liability concerns, also has a problem with the county potentially forfeiting millions of dollars in property tax revenue over the PILOT’s 30-year duration.
“This has not been a casual decision on my part. I do not want the county to take on this liability,” Miller said.
Citing recent Environmental Protection Agency efforts to curtail greenhouse gas emissions that likely will force the closure of many coal-fired power plants, Miller said there is no guarantee this would not eventually happen with a natural gas electricity generator.
“With the EPA writing their own rules, who knows what they will try to do against natural gas power plants over the next 30 years? They could change emissions standards two years from now, making it too expensive to operate a plant like this,” Miller said.
Dorn said he and his associates plan to carry a “huge amount of insurance” to indemnify Marshall County taxpayers from any potential liability.
“This is not a new concept. We think it is fair,” he said. “We are just transferring it to them in name only.”
As it stands, the PILOT calls for the county to take official ownership of the natural gas power plant upon its completion for the sum of $1, while Moundsville Power would lease the facility from the county. Commissioners would receive $31 million worth of lease payments over 30 years via the PILOT plan.
The project won’t happen without the deal, Dorn said.
“Eliminating the PILOT would be a deal-breaker,” Schambach said.