WVPSC FEB 13 2015 Moundsville Order.Pdf
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PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON At a session of the PUBLIC SERVICE COMMISSION OF WEST VIRGINIA in the City of Charleston on the 13thday of February, 201 5. CASE NO. 14-1221-E-CS MOUNDSVILLE POWER, LLC, Buffalo, New York. Application for a Siting Certificate to Authorize the Construction and Operation of a Wholesale Electric Generating Facility and Related Transmission Support Line of Less Than 200 kV and associated Interconnection Facilities in Marshall County, West Virginia COMMISSION ORDER GRANTING A SITING CERTIFICATE FOR A WHOLESALE ELECTRIC GENERATING FACILITY IN MARSHALL COUNTY This Order addresses the application filed by Moundsville Power, LLC (Moundsville Power) for a Siting Certificate to construct and operate a natural-gas fired wholesale electric generating facility of approximately 549 megawatts (MW) in Marshall County. including a transmission line, interconnection facilities and other necessary appurtenances, as is more fully described in this Order. Based upon a thorough review of the evidence and the public support shown for the proposed plant, the Coininission will grant a Siting Certificate to Moundsville Power, subject to the terins and conditions set forth in this Order. I. PROJECT DESCRIPTION On July 3, 2014, Moundsville Power' filed an application for a Siting Certificate2 pursuant to W. Va. Code $5 24-2-1(c) and 24-2-11c to authorize the construction and operation of a natural-gas fired base load combined cycle wholesale electric generating 1 Mouiidsville Power, a Delaware limited liability company, is authorized to do business in West Virginia. Mouiidsville Power's Application consisted of two large voluines, iiicludiiig aii Appendix, inultiple Exhibits. tables, figures and other documents. The Applicatioii was filed pursuant to the Coinmission's Rules Governing Siting- Certificates for Exempt Wholesale Generators (Sitiiia Rules), 150 C.S.R. Series 30. facility of approxiinately 549 MW (Facility or Project) about three iniles south of I Moundsville, including an approxiinately 500-foot 138 kV (less than 200,000 volts) transmission line. interconnection facilities and other necessary appurtenances as inore particularly described in the application. Upon completion, the Facility will be used to generate electricity for sale in the competitive wholesale market in West Virginia and other locations. Moundsville Power stated that the plant will utilize state-of-the-art natural gas- fbeled electric generating equipment consisting of two combustion turbines (CTs) that will drive two combustion turbine generators (CTGs). The CTGs will be connected to two heat recovery steam generators (HRSGs) that will use exhaust heat from the CTs to generate high-quality, superheated steam. The steam will drive a single steam turbine that will drive a steam turbine generator to generate electricity. The Facility also will have cooling towers, a switchyard, a water treatment building, a inaintenance building and other auxiliary structures. Application Forin 2, at 2; Application at 2. The new plant will generate enough electricity to power some 325,000 homes. Moundsville Power stated that additional generating capacity is needed in the PJM3 power market. In the Ohio River Valley, 3,870 MW is scheduled to close by 2015. Close to the proposed Moundsville Power plant, the 541-MW R.E. Burger Plant in Shadyside, Ohio, has closed and the 713-MW Kaininer Plant outside of Moundsville will close. Moundsville Power stated that it will directly fund significant upgrades to inore than nine iniles of local power grid infrastructure as required by PJM. The plant location is close to several natural gas production and processing facilities and transmission pipelines. The Facility will receive blended fuel of 25 percent ethane and 75 percent natural gas. Application Forin 2, at 2; Application at 3. The fuel blend is not available froin local natural gas distribution companies, pipelines or natural gas suppliers. Application Appendix at 4, 5, 14. Large volumes of natural gas are being produced in the area near the Moundsville Power plant, but the natural gas is generally "wet" and inust be processed before it can be used for various purposes. For instance, to obtain utility-grade natural gas to burn in household appliances, ethane is one of the elements that is removed froin wet gas. Ethane burns hotter than natural gas and in most market settings is inore valuable than natural gas. A lot of ethane froin around the country is transported to Louisiana, where it is processed and sold. Because large volumes of natural gas (and ethane) are being produced near Moundsville and there currently is no available means to transport 3 PJM Iiiterconiiection Association, a regioiial traiisinissioii organization, coordinates the movement of electricity through all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland. Michigan. New Jerseq , North Carolina, Ohio, Peiinsy lvania, Tennessee, Virginia, West Virginia and the District of Columbia; operates a n.holesale electricity market; and manages a long-term regional electric transmission plaiiiiiiig process to inaintaiii the reliability of the power supply system. Application Appendix at 1; Applicant Ex. JPB-D at 7. 2 the ethane to market in Louisiana, the local price of ethane is depressed. The 1 Moundsville Power plant can use local ethane as a fuel source when it is economically I feasible and doing so provides a West Virginia outlet for a commodity. If a local market develops or transportation becomes available to move the locally-produced ethane to Louisiana or other markets to be sold for a higher price, the Moundsville Power Facility can operate using only natural gas as fuel. Tr. at 54-55 (Dec. 9, 2014). Moundsville Power stated that it has conducted multiple rounds of a competitive bid process to select a third party to design, permit, construct, own and operate a dedicated pipeline and fuel mixing station to serve the Facility (Pipeline). The lowest bid received was a joint proposal froin Vineyard Oil & Gas Company and East Resources, Inc. Applicant Ex. ADWIV-R at 6. The Pipeline's priinary source for the delivery of natural gas will be from the Texas Eastern Transinission pipeline (Tetco) and the priinary source of ethane will be froin Blue Racer Midstream's Natrium natural gas processing plant (BRM). The Pipeline will interconnect to Tetco and BRM about 5.5 ides south of the Facility with two 16- inch pipeline taps to Tetco, a meter and regulation station and a tap to a BRM pipeline with a meter and regulation station. A natural gas and ethane mixing station will be built close to the Tetco and BRM taps. a. at 8. The Facility will use water froin the Ohio River for cooling. Excess cooling water and storinwater will be discharged into the Ohio River. Application Appendix at 5. The power generated by the Facility will be delivered to an existing American Electric Power (AEP) substation (Washington Substation). The 500-foot transmission line will begin at the northeast corner of the Facility and cross West Virginia Route 2 to the Washington Substation. Application at 2; Application Forin 2, at 3. Moundsville Power stated that General Electric (GE) will inanufacture the generation equipment and provide preventative and on-call maintenance. Moundsville Power will enter into a contract with a qualified engineering, procurement and construction contractor to inanage construction and with a qualified operation and maintenance firin with experience operating a GE combustion turbine plant to operate, manage and maintain the Facility. Application at 2-3. The plant will be located on a 37.2-acre portion of the 382-acre Allied-Hanlin- Olin USEPA Superfund Site that was previously the home of a chemical inanufacturing facility. Moundsville Power stated that the 37.2-acre parcel has been remediated. Application Appendix at 3. Moundsville Power asserted that constructing the plant at this location will allow redevelopment of a portion of an otherwise environmentally stigmatized property. Further: a trained and qualified local labor pool is available that has the requisite skills to coiistruct the Project. Other factors that contributed to the selection of this site include that the parcel is within 500 feet of the AEP Washington Substation where the Facility will interconnect with the PJM grid, in the area of Marcellus Shale production in West Virginia resulting in readily available natural gas and ethane fuel, and 1,700 feet froin the Ohio River providing access to obtain and discharge water. Application Appendix at 3 8; Tr. at 24. Moundsville Power asserted that neither the Facility nor the transmission line are utilities providing service to the public, and there will be no impact to West Virginia ratepayers. Moundsville Power further asserted that it will be the entity responsible for the construction and operation of the Facility and for the sale of electricity generated by the Facility. Moundsville Power will operate the plant as an exempt wholesale generator as defined under Section 32(a) of the Public Utility Holding Company Act of 1935. Application Form 2, at 2. Moundsville Power estimated that it will cost approximately $6 15 million to construct the Facility and the transmission line. Id.;Application Appendix at 70. Moundsville Power stated that the Project funding m7ill be a combination of equity and term B market loans. Moundsville Power has entered into a PILOT (payment in lieu of taxes) agreement with the Marshall County Board of Education and the Marshall County Coinmission (MCC) whereby Moundsville Power will be exempt froin ad valorem property tax for 30 years and will make payments for proportional distribution to the Board of Education and MCC of $4,200,000 during a 30-year term. Moundsville Power has also entered into a Lease Agreement with the MCC, under which Moundsville Power will make an upfront payment of $970.000 and annual lease payments for 30 years totaling approximately $39,292,865. The basic rent schedule can be reduced by a job credit of up to $300,000 annually, resulting in a total rent agreement package of $3 1.262,865 to $40,262,865.