West Virginia Awards Certificate for New Gas-Fired Station
Noting that impending coal plant closures both within the state and within PJM Interconnection’s footprint are likely to cause a widespread need for new generation within the next few years, the West Virginia Public Service Commission has granted a siting certificate to a developer to construct an 830-megawatt (MW) natural gas-fired generating facility in Brooke County, which is the northern most county in West Virginia. The project was proposed by ESC Brooke County Power I, LLC, which intends to operate the new plant as a merchant generator, offering its output into the wholesale markets overseen by PJM. In approving a certificate for the company, the commission emphasized that there is no utility involvement or investment in the project, such that ratepayers will not be liable for any of the project’s costs, which the sponsor estimated would come to about $884 million.
According to ESC Brooke County’s application, the new facility will be located within the Cross Creek Wildlife Management Area, which is administered by the state’s Department of Natural Resources. The project will consist of two combustion turbines and one steam turbine, with the power produced thereby being routed to a 345-kilovolt three-breaker ring bus substation that is being built immediately east of the generating units. The substation is owned by FirstEnergy Corporation. The project sponsor reported that it already has entered into several supply contracts for the delivery of natural gas and ethane. The pipelines providing the supplies will be dedicated to the new generating station and will be constructed and operated by third-party pipeline developers.
The company also informed the commission that it already has executed an agreement with the Brooke County Commission for a paymentin- lieu-of-taxes arrangement. The developer stated that it expects the new units to be completed by the end of 2020, such that service can commence as of the beginning of 2021.
In looking at the proposal, the commission confirmed the need for new generation. It explained that just since 2012, seven coal-fueled power plants in the region have been retired, leading to the loss of more than 2,600 MW of capacity. In addition, the commission cited data from PJM indicating that from 2011 to 2020, the grid under its control will lose more than another 29,000 MW of generation due to planned facility retirements.
Moreover, the commission said that the design of the ESC Brooke County plant, which will have a heat rate of approximately 6,600 British thermal units per kilowatt-hour, will assure much more efficient operations than the simple-cycle natural gas-fired generating units presently operating in the state. In turn, the commission stated, such improved efficiency will translate into more cost-effective operations.
The commission found that the proposal had other economic attributes as well, primarily with respect to job creation and new employment opportunities. The commission commented that ESC Brooke County anticipates that 400 jobs will be available during the construction phase while 30 permanent positions will be in place once commercial operations actually commence. The commission further asserted that given the new plant’s significant demand for natural gas supplies, the project also will help support West Virginia’s natural gas industry.
The commission maintained that although the new facility would be located within a wildlife management area (WMA), there would be little disturbance to nearby habitats, with any adverse environmental impacts expected to be minimal. The commission explained that the WMA had been carved out of former surface coal mine lands, with the WMA totaling 2,078 acres.
Of that land, the power plant will use only about 20 acres, or approximately one percent of the WMA. Plus, the commission said, the WMA is overwhelmingly undeveloped woodland, with numerous changes in elevation. Thus, the commission determined that construction of the new units will have little effect on the viewshed.
Finding that allowing the project to proceed would offer significant economic benefits for the state and likewise would enhance grid reliability, the commission concluded that, subject to certain conditions and limitations, a siting certificate should be issued to the developer. Re ESC Brooke County Power I, LLC, Case No. 17-0521-E-CS, Feb. 20, 2018 (W.Va.P.S.C.).