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December 02, 2007 12:23 am
Editorial: Co-Gen plant
It’s been more than five years since plans were unveiled for the Western Greenbrier Co-Generation plant.
CNHI News Service
— Editorial: Co-Gen plant
There should have been better planning to address possible obstacles
Opinion: The Register-Herald, Beckley, W.Va.
It’s been more than five years since plans were unveiled for the Western Greenbrier Co-Generation plant.
It was hailed as “the flagship project” in the advancement of clean coal technology. The 98-megawatt power plant would burn coal from a nearby gob pile and generate enough electricity to power 85,000 homes. It would also provide low-cost electricity for a proposed eco-park housing a variety of businesses. It promised hundreds of local jobs and a tremendous economic boost for the area.
In January 2003, the U.S. Department of Energy awarded the project $107.5 million, half of the estimated $215 million cost. The other 50 percent was expected to be raised from the sale of bonds.
Much has happened in the years since. For one, the total cost of the project is now estimated at $400 million or more, about double the original figure.
A government Environmental Impact Statement, all 1,590 pages of it, took nearly five years to complete, further delaying matters.
And now, the West Virginia Economic Development Authority is on the hook for $3 million if the plant does not get built. The EDA had guaranteed $3 million of a $4.87 million loan made to Western Greenbrier Co-Generation by First National Bank of Ronceverte — money to cover the local match to pay for engineering and feasibility studies. The EDA has begun processing a claim for the $3 million after the bank decided not to extend the loan.
This wasn’t how it was supposed to work.
David Warner, the EDA’s executive director, said in the time it took to complete the engineering and feasibility studies, “project costs escalated and it’s tougher to put a successful financing package in place. Not impossible, just more difficult in today’s environment.”
The project is not dead. Officials hope to sell bonds in the spring, which would pay creditors, but instead of a bond sale of $107.5 million, the figure is now $300 million. It could be another three years before the plant is completed.
“You can only issue ‘X’ amount of bonds at a certain interest rate and be able to pay it back with the revenue of an electric generating plant,” Warner said.
“It is still possible, and we are hoping there is a company or an entity that can step in and give them the opportunity to keep putting these things in place. The project is not necessarily dead — the underlying financing has just run out.”
The point here is not to assess blame. It’s just with a project of this magnitude, there should have been better planning all the way around to address all possible obstacles.
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