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Construction of $500M power plant in South Huntingdon stalled

On the Grid

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Sunday, July 27, 2014, 10:54 p.m.

The enormous cost of building gas-fired power plants, coupled with regulatory complexities, may mean only one in five proposed plants ever will be built, says the regional grid operator that moves wholesale electricity in all or parts of 13 states and the District of Columbia.

But Ray Dotter, spokesman for PJM International, the Valley Forge transmission group, predicted a plan by Omaha-based Tenaska Inc. to build a $500 million power plant off Interstate 70 in South Huntingdon has a good shot because it has negotiated many obstacles.

“Less than 20 percent of proposals actually get built, but the Tenaska proposal has a higher probability,” Dotter said.

Tenaska purchased 400 acres to build a 930-megawatt plant and secured permits. It invested about $500,000 with the Westmoreland County Municipal Authority to reserve water for the plant.

Even so, Tenaska has delayed the start of construction until next year, partly because it hasn't penned long-term commitments to buy electricity necessary to recoup the cost of building.

The company is seeking 30-year contracts with power companies, said Michael C. Roth, Tenaska's director of development.

“It seems folks are looking for shorter tenure. We're trying to work through it,” Roth said. “We have seen growth for power, but it has been sluggish due to the economy. We have not seen the demand we expected, but we remain optimistic.”

It's optimism fueled by tightening federal emissions regulations forcing the planned deactivation or retirement of six coal plants in Pennsylvania by 2019.

Of the 32 gas-powered plants proposed for Pennsylvania, only one, by Texas-based Panda Power Projects, is under construction.

“You have to have customers to sell power,” said Jake Smeltz, president of the Harrisburg-based Electric Power Generating Association.

Once built, however, gas-powered plants are cheaper to operate than coal- or nuclear-fired plants, Smeltz said.

Panda's 829-megawatt plant in Asylum in Bradford County, will provide electricity to 1 million homes. Thirty months of construction began almost a year ago.

“The market needs power,” said Panda spokesman Bill Pentak. He said the plant's proximity to Marcellus shale-gas fields significantly lowers the company's operating costs.

But it wasn't a smooth road for Panda.

“It's not easy to finance,” he said. “It's very capital-intensive. There are so many requirements that the question is, ‘Can you take it to Wall Street?' ”

Two other plants planned for Western Pennsylvania are in development:

• Construction has not begun on a 900-megawatt unit proposed by New Jersey-based LSPower in North Beaver, Lawrence County. The state issued permits for the $750 million plant along the Mahoning River. Company officials did not return phone calls or emails seeking comment.

• A plan by Robinson Power/Beech Hollow Energy for a plant in Robinson, Washington County, has been delayed since its 2011 proposal. Company owner Ray Bologna, who could not be reached, told the Tribune-Review earlier that he would seek better technology for the plant.

Rich Cholodofsky is a Trib Total Media staff writer. Reach him at 724-830-6293 or rcholodofsky

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