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Lawrence County power plant takes another step forward

Sunday, May 19th, 2013

thCA20Q66ABy Timothy Puko

A $750 million power plant project in Lawrence County  has taken a big step toward reality with the approval of its state air permit by  the Department of Environmental Protection.

Industry officials cheered the decision disclosed by  the DEP over the weekend as possibly the biggest hurdle New Jersey-based LS  Power had to clear to build the Hickory Run Energy Station.

“We viewed the air permit as kind of the keystone  permit for the project,” project manager Casey Carroll said. “When we feel like  the market conditions are right, then we will be able to go ahead and complete  the project.”

The company is still studying funding and applying  for “minor” construction, storm water and erosion and sediment permits with the  goal of starting construction in North Beaver by 2014, Carroll said.

While experts agreed that the permit is an important  step for the project, they were split on the larger ramifications. It is one of  nine projects trying to capitalize on a bounty of cheap shale gas in the region,  a crowded competition for space on the electric grid to replace a wave of  retiring coal-fired generators.

But if this plant, at a 900-megawatt capacity, can  get a permit, it might be a good sign for all of them, said Gregory Reed,  director of the Power & Energy Initiative at the University of Pittsburgh.  Eight of them, including a proposed Westmoreland County project, are between 650  and 1064 megawatts, reversing a recent trend of building small plants producing  25 to 50 megawatts, he said.

“It’s great to see us now starting to become a part of  the major infrastructure of energy development, rather than just a location for  resource potential,” Reed said. “I think there’s a lot of economic development  that will come with a generating station like this.”

Company officials have projected about 500 workers  during a two-year construction, followed by about 25 permanent employees to  operate the plant. The plant will be built on land vacant since the 1960s, a  former American Cyanamid Co. explosives manufacturing plant just east of state  Route 551.

A DEP spokesman said the plant needed the permit by  May to take part in regional utility auctions that started on Monday, though  Carroll said he couldn’t comment on financial details. If it’s in those  auctions, its performance there could be critical to its success, said Jake  Smeltz, president of the Electric Power Generation Association.

The auctions bid out future capacity years in  advance, which helps finance plant construction for the companies that use it.  And while natural gas prices are theoretically low enough for it to be a star,  other factors have limited it to winning only about a third of the future  capacity that’s been auctioned in past years, Smeltz said. Several plants that  have pursued long-term purchase contracts outside of that wholesale market are  still looking, he added.

“The markets right now are very difficult,” he said. “Natural gas should be thriving, yet the current conditions in the marketplace  are frustrating gas developers. I think those gas developers who have been  successful will have to have been ahead of the curve.“

 

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