Andrew Dorn Jr., the Co-Managing Member of Moundsville Power LLC, was one of several company representatives that supplied Sept. 11 testimony to the West Virginia Public Service Commission about a gas-fired power project.
Moundsville Power has applied for a siting certificate to construct, own and operate a natural-gas fired wholesale generating facility of about 549 MW, including an approximately 500-foot 138-kV related transmission support line, associated interconnection facilities, and other necessary appurtenances. The project is located approximately three miles south of Moundsville in Marshall County, West Virginia.
Said Dorn about the management team for the project: “Mr. Jon Williams has over 30 years’ experience in managing major projects and has worked with many of the largest industrial companies in the world. He owns a large company focused on environmental remediation and demolition work in both North America and South America. Mr. Williams’ primary role is the design and construction of the Facility and he will be involved with the Facility on a daily basis once construction commences. Mr. Chris O’Donnell has an MBA and was a commercial and investment banker for over 20 years. He is a partner in a private equity firm and has extensive investment banking and hands on operational experience. Mr. O’Donnell focuses on the financial projections and the financing of the Project. Mr. Drew Dorn has a degree in engineering and an MBA and has extensive experience in the natural gas and power industries. He owns and operates a company that aggregates demand response electricity in the PJM and NYISO grids. Mr. Dorn is our expert in natural gas and the power markets. Mr. Matthew Dorn is a certified public accountant and is Moundsville Power’s chief financial officer. He has extensive public accounting experience and has served as the chief operating officer of a multistate nursing home company. Mr. Dorn has developed the Project’s financial projections and has been closely engaged with the retention of all of Moundsville Power’s professional advisors. Mr. Dorn also works on a daily basis with Moundsville Power’s project manager, John P. Black, in development of the Project.
“The development team foresaw a shortage of electric supply resulting from planned retirement of existing, mostly obsolete, coal fired plants in the Ohio River area and speculated that many more coal fired plants could be forced to close as a result of the proposed EPA clean air regulations. We identified the Moundsville site as a result of the working relationship Moundsville Power member Jon Williams has with Honeywell International. Moundsville Power identified and obtained an option to purchase 37 acres at the site of the former Allied Chemical Plant facility, approximately 3 miles south of Moundsville.
“The site is an ideal location for Moundsville Power’s proposed Facility for numerous reasons. First, the site and surrounding area has been a location of industrial activity for over 50 years. Second, the site is located right in the middle of the PJM Interconnection ‘super highway’ of transmission lines with easy access to 3 different transmission lines. Further, American Electric Power‘s George Washington substation (which feeds directly into a 138 KV transmission line) is located directly across U.S. Route 2 from the site, which will allow connection of the Moundsville Power Facility to the substation with a minimal length of transmission line. Third, the site is located on the Ohio River which will provide an abundant source for cooling and process water. Fourth, there is very abundant natural gas available throughout the northern panhandle with multiple gas pipelines within very close proximity to the site. Fifth, the site is easily accessible for the delivery of large, heavy loads via WV Route 2 or the Ohio River. Finally, market dynamics with the current and planned closing of many coal fired generation stations throughout the PJM grid also made the economics for a natural gas fired power plant in this location very attractive.”
Project is in the PJM queue
Dorn added: “Moundsville Power entered the PJM project queue in March 2013. The PJM approval process consists of an initial feasibility study, a system impact study and a facilities study. To date we have successfully completed the feasibility study and the system impact study. The facilities study will be completed no later than December 31, 2014 at which time we will enter into an Interconnection Service Agreement with the PJM Interconnection and a Construction Services Agreement with American Electric Power to perform the required system upgrades. Moundsville Power became an active member of the PJM Interconnection in early 2014 and we have applied for and received a Minimum Offer Price Rule (MOPR) exemption so that we can submit a zero price bid in the 2018/2019 Capacity Auction in May of 2015 to procure Capacity Payments when the plant commences commercial operation in June of 2018.
“Moundsville Power has received responses from four engineering, procurement and construction firms (EPCs) to its Request for Proposal (‘RFP’) to engineer and build the Facility. Responses to the RFP were received on August 30, 2014, and we have begun the process of analyzing the many hundreds of pages in each submission and to make a final selection. We expect to negotiate a Memo of Understanding with the selected EPC in the near future, and will then proceed to finalize a contract with that EPC.
“Moundsville Power also received proposals on August 30, 2014, from three firms for operation and maintenance of the Facility, and we plan to proceed on the same time line in analyzing these submissions as set forth above. Moundsville Power will have a long term maintenance agreement with General Electric (‘GE’) for the turbines and other power island equipment supplied by GE.
“After extensive analysis we selected GE turbines for the Facility. GE is the largest manufacturer of combustion turbines in the world, and they have provided a great deal of engineering support and guidance throughout the evolution of the Project and will help assure the successful completion of the Facility. The GE turbines will also allow us to burn up to 25% of our fuel need in ethane which we believe will provide a unique economic advantage to our Facility. An abundance of ethane currently exists in the West Virginia northern panhandle and we believe we can acquire the ethane at an advantageous price which will benefit the long term feasibility of the Facility.
“Moundsville Power engaged investment banker, KeyBanc Capital Markets, very early in the process to insure that Moundsville Power properly structured the Project so that it could be financed with traditional financial vehicles. The market to finance combined cycle gas fired power plants continues to be very robust and KeyBanc has assured us that it will have no trouble raising the required capital. We have had many preliminary conversations with potential funding sources, who have expressed a high level of interest in the Project. Moundsville and KeyBanc will reconvene these conversations at the appropriate time, typically 90-120 days before our planned financial close date. Based on our June 2018 commercial operation date with PJM and the 32 month construction period, construction must start no later than September of 2015 and we are hopeful that we can complete all required steps to proceed to financing in March or April of 2015.”