Ohio Governor advocates for local government

From an Article by Tyrel Linkhorn, Toledo Blade, August 21, 2017

His voice slightly raised to get above the low thrum of the Oregon Clean Energy power plant behind him, Gov. John Kasich made clear on Monday where he stands on Ohio’s electric future. “This is the future. This is a big deal,” the governor said of the Oregon plant.

On 30 acres, the gas turbines at Oregon Clean Energy generate 870 megawatts — nearly as much electricity as FirstEnergy Corp.’s sprawling Davis-Besse nuclear power station in Ottawa County, which produces 900 megawatts. And, thanks to a glut of natural gas in Ohio, Pennsylvania, and elsewhere across the United States, the new plant does so with significantly better economics.

That’s been a boon to places like Oregon, where access to water, natural gas, and the electric grid have come together to lure in some $1.7 billion in new investment from independent power companies.

VIDEO: Tyrel Linkhorn discusses the opening of Oregon’s new natural gas power plant

About half of that went to the Oregon Clean Energy plant, which began producing electricity for customers on July 1 and is owned by investment funds Ares Management L.P. of Los Angeles and I Squared Capital of New York. The other $900 million will go to a nearby second gas-turbine facility, owned and developed by Manchester, Mass.-based Clean Energy Future LLC, which is expected to start construction next year.

“I think it’s important that Ohio stay in a deregulated environment which brings these investors,” Mr. Kasich said. “If all of a sudden you don’t have a level playing field, then you don’t have significant investment. People go in another place.”

While the governor didn’t mention FirstEnergy in his prepared remarks, the Akron-based utility seemed to be on his mind. The company has sought help from the state legislature to force customers to subsidize the operations of its two nuclear plants, including Davis-Besse. Otherwise, FirstEnergy has said, the sites will close.

Mr. Kasich did take a question after the event on whether he could in any way support that company’s request for what critics have called a bailout. “Not at this point,” Mr. Kasich said. “I think that economic decisions have to be made, and I just think they’re going to have to work their way through this themselves.”

The governor also said in a brief interview that he supports having renewable power sources as part of the mix and still sees a role for coal-fired plants. Even so, the area’s last coal-fired plant — FirstEnergy’s Bay Shore in Oregon — already has shut down its coal-fired generators. The plant is to close entirely in 2020.

Oregon Clean Energy makes its power from natural gas. The site has three generators. Two are powered directly by natural gas, while the third is spun by steam that’s generated from the exhaust heat of the other two turbines. Water used for cooling and for steam generation is purchased from the city of Oregon. Oregon Clean Energy’s owners invested $12 million into Oregon’s water infrastructure to pay for upgrades.

“Every day we get our dispatch for the next day. We bid this into the market every day,” Mr. Rigney said. “That’s what makes it so efficient. We have no subsidy, we have no captive ratepayers. We have to make our dollar every day.”

But Mr. Kasich, the term-limited governor who has said he’s not planning to run for any other office again, also went through what seemed to be the high points of a campaign speech. That included Ohio’s rainy day surplus, job creation numbers since he’s been in office, and — unprompted — an aside about the state’s Medicaid expansion under the Affordable Care Act.

“One of the great things that we’ve been able to do is the expansion of Medicaid. Because what it’s done, is it’s opened opportunities for the mentally ill, the drug addicted, and the chronically ill,” he said. “Think about this for a second, if one day you woke up and you had no health insurance. Can you imagine what your life would be like?”

Mr. Kasich made a brief reference to the recent events in Charlottesville, but he did not mention President Trump. He did, however, suggest answers to many problems are going to be found locally.

“It’s us and our neighbors. We wonder about the big leaders and all that,” he said. “At the end of the day, it’s not the big leaders, it’s the people who live in the communities like Oregon who make such a big difference.”

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SLIDESHOW: At least 10 natural-gas fired power plants in development in Ohio.

Marshall County Courthouse

Jobs Alliance at Odds With Marshall County Gas-Fired Plant

From an Article by Alan Olson, Marshall County Reporter, Wheeling Intelligencer, October 19, 2016

PHOTO: Demonstrators from local unions stand at the Marshall County Courthouse before a county commission meeting Tuesday during which the Ohio Valley Jobs Alliance spoke against the proposed Moundsville Power plant.

Moundsville, WV — Representatives of the Ohio Valley Jobs Alliance spoke out against the planned construction of Moundsville Power’s natural gas-fired power plant during Tuesday’s Marshall County Commission meeting.

Construction on the plant, which was slated to begin this summer, was recently delayed after the alliance filed appeals against the plant’s air quality permit to the West Virginia Department of Environmental Protection. The group claimed the plant would produce emissions in excess of what’s allowed by regulations.

Ohio Valley Jobs Alliance President Jim Thomas, joined by Bruce Whipkey, sought answers from the commission regarding how the plant had been brought to the area. Specifically, Thomas questioned the decision to offer Moundsville Power a 30-year payment in lieu of taxes agreement to build the plant.

“No one in Marshall County’s ever gotten a 30-year tax break, that we know of,” Thomas said. “These people that I talk to don’t know about the tax break. All they hear is that Marshall County’s getting a million dollars. That sounds good. How much is the school board not getting?”

Assessor Chris Kessler estimated an annual tax payment of $7.58 million for a total tax income of more than $227 million over the 30-year period of the agreement, if the tax break had not been offered. County records indicate that under the negotiated lease payment schedule, the county will receive between $100,000 and $175,000 annually over 30 years, distributed in the same way as tax revenue. Additionally, the rent schedule will bring in an additional $39.29 million over 30 years, reduced by $9 million if at least 30 employees are kept on the roster.

“If you don’t use the tools that you have in front of you, and they go somewhere else, what do you have? In 30 years, you’d have nothing on top of nothing,” county Administrator Betsy Frohnapfel said.

In 2014, former Commissioners Don Mason and Brian Schambach voted to grant Moundsville Power the tax break, with Commissioner Bob Miller voting against it. Mason did not seek re-election in 2014, while Schambach resigned after moving out of the county and is now running for a Belmont County Commission seat. Miller was absent from Tuesday’s meeting.

Commissioner Scott Varner defended the previous commission’s actions, indicating other counties had offered similar incentives to industries, and that the commission would be open to offering the same incentive to other businesses. “I will sit here today and tell you if another plant wanted to build here, coal-fired, I would give them the same tax break,” Varner said.

Thomas also questioned why the Moundsville Power plant was offered the tax incentive, while other family-owned businesses aren’t offered the same benefit. After the meeting, Frohnapfel said that the tax incentive opportunities available to small businesses did not exist in the same capacity that existed for industry.

No one from Moundsville Power was present at Tuesday’s meeting. Company spokesman Curtis Wilkerson declined to comment when contacted after the meeting.

A number of union representatives gathered outside the courthouse before the commission meeting to oppose the comments by the Ohio Valley Jobs Alliance.

Scott Mazzuli, business representative for Sheet Metal Workers Local 33 and vice president of the Upper Ohio Valley Building and Construction Trades Council, disputed the alliance’s claims. Mazzuli pointed to the 2015 closure of American Electric Power’s Kammer Plant, a coal-fired power plant along the Ohio River, and wondered where the concern for coal jobs was at the time.

“What’s been done since the Kammer plant shut down? He speaks about coal and coal jobs, but explain to me where the coal barons have come to build a new coal-fired power plant. They haven’t,” Mazzuli said.

“This does create jobs, in lieu of how many people have lost their jobs. Natural gas is another resource other than coal that’s in this state, and businesses are smart enough to know they can operate with that, cheaper.

“Where were these guys when Axiall decided to convert their coal-burner into a gas-fired plant over the summer? This is nothing more than the coal barons of the world who fund this thing, to stop this, but what did they do to stop the Kammer plant from closing?” Mazzuli continued.

Golf Course Adjacent to Power Plant Site

Moundsville Power Natural Gas Plant Still Set for 2018 Online Date in Marshall County

From an Article by Casey Junkins, Wheeling Intelligencer, June 3, 2016

Moundsville, WV  — In less than two years, 549 megawatts of natural gas-fired electricity are scheduled to come online at the planned $615 million Moundsville Power plant.

In early 2015, plant developer Andrew Dorn said his company hoped to start building the facility at the site along W.Va. 2, just north of the Moundsville Country Club, before the end of this year. To this point, however, the project site appears very much as it did in June 2014.

Dorn could not be reached for additional comment for this story, but said last year the plant needed to be operational by June 1, 2018. Moundsville Power spokesman Curtis Wilkerson said the delays are the result of objections to the West Virginia Air Quality Board regarding the facility’s air permit. The air board’s website shows the appeal as pending. “These delays are directly a result of the Ohio Valley Jobs Alliance,” Wilkerson said of the group that formed to support coal-fired electricity.

“Natural gas-fired plants like the proposed Moundsville facility may cause coal-fired plants to close,” alliance spokesman Jim Thomas said. “Coal made the state of West Virginia.”

Still, Marshall County Commissioner Bob Miller said he believes the plant remains on schedule. “As far as we know, everything seems to be moving forward with it,” Miller said. “We keep hearing that they are going to break ground late this year or early next year.”

The U.S. Energy Information Administration projects 2016 to be the first year natural gas generates more electricity than coal. As plants that burn coal continue closing across America, the administration believes 18,700 megawatts of new natural gas generation will enter service before the end of 2018, including that from the Marshall County site.

The plant is slated for construction on about 37.5 acres of the “Hanlin-Allied-Olin” area, which is considered an Environmental Protection Agency Superfund site. The former Allied Corp. operated the site for chemical production from 1953 to 1980.

According to Dorn, the company plans to meet the $615 million price tag with private financing. He said his plant would be a “combined-cycle” facility that would use natural gas to propel one of its turbines, while using the exhaust heat from this process to drive an additional steam turbine.

Dorn said the facility will use about 100 million cubic feet of natural gas – roughly the production of two or three successful horizontal wells – daily to produce its electricity. The company’s website states it plans to use existing American Electric Power transmission lines to place its wattage on the grid.

In 2014, former Marshall County commissioners Don Mason and Brian Schambach outvoted Miller, 2-1, to approve a payment in lieu of tax, or PILOT, plan to facilitate the power plant’s construction. Under the PILOT, the county will take official ownership of the natural gas power plant upon its completion for the sum of $1, while the firm will lease the facility from the county.

Instead of receiving regular property taxes, commissioners will receive about $31 million worth of lease payments over 30 years via the PILOT plan.

Two years later, Miller said he stands behind his vote against the PILOT agreement, even though Dorn has said the project will create 400 construction jobs and 30 full-time jobs. “Those will be 30 jobs we don’t have, plus the mineral owners will get royalties for their gas being used in the plant. I just don’t think the government should be in the business of owning power plants,” Miller said.

Miller said AEP, which closed the nearby coal-fired Kammer Plant last year, is not getting a similar deal on its property taxes. “I just find that totally unfair. They are getting a special tax deal that AEP is not getting,” Miller said.

Miller also said the transition from generating electricity with coal to natural gas puts thousands of mining and related jobs at risk. “Getting some new jobs is great, but what about the jobs that are already here?” Miller said.

Dorn has previously emphasized that many of the coal generators were already slated for retirement, so his company is merely using abundant Marcellus and Utica shale natural gas to fill the resulting void.

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See also the EIA update on natural gas fired power plants under development.

New Gas-Fired Power Plant

Marshall County plans for natural gas combined cycle power plant

Based on an Article from the Staff, State Journal, April 24, 2014

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.. The group is planning to construct a 549 megawatt natural gas combined cycle power plant on a 37.5 acres south of Moundsville. This site is currently owned by Honeywell International. The location is next to a Williams Energy fractionator and commonly known as the Allied Chemical site.

This $615 million plant is a base load facility generating power 24 hours per day.. 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 October 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. Allied Signal operated the site from 1953 until 1980. The North Plant and the South Plant had “distinctly different chemical processes,” according to the EPA, with vastly different chemicals used at each.

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 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, making the plant more fuel-efficient.