Panda partners with Sunbury on 1,000-MW coal-to-gas project in Pennsylvania

Panda Power Funds said Feb. 17 that it has entered into a joint venture with Sunbury Generation LP to develop, finance, construct and operate a 1,000-MW natural gas-fueled, combined-cycle project near Shamokin Dam in Snyder County, Pennsylvania.

The Hummel Station facility will occupy an 18-acre parcel of the 192-acre Keystone Opportunity Expansion Zone at the site of the recently retired Sunbury coal-fired power plant. Hummel Station is expected to be one of the largest coal-to-gas conversion projects in the United States. The new plant is expected to supply large power markets, including Philadelphia and New York City, when it enters commercial operations in the second half of 2017.

The facility’s access to Marcellus Shale gas through the Marc I, Regency and Transcontinental regional gas pipelines is expected to provide Hummel Station with a significant operating cost advantage, Panda noted. The plant will interconnect to the pipelines through a 35-mile lateral that will be constructed by a subsidiary of UGI Energy Services. UGI commenced the permitting process for the pipeline with the Federal Energy Regulatory Commission in December 2014 after completing a year of environmental and cultural surveys.

“I’m extremely proud of the Panda team in their work with Sunbury Generation and UGI Energy Services to complete the lateral pipeline agreement. Finalizing the agreement makes the entire project possible,” said Todd W. Carter, president and senior partner of Panda Power Funds. “We continue to see Pennsylvania as a great place to invest and are strengthening our roots here by partnering with well-established companies in the Commonwealth.”

“We found a great partner in Panda,” added Dave Meehan, president of Sunbury Generation. “They currently have more generating capacity under construction in the United States than any other company. They have a deep bench in the power industry and know what they are doing.”

Panda Power Funds has two Marcellus gas-fueled stations currently under construction in Bradford and Lycoming counties, Pa. The 829-MW Liberty power plant, located in Towanda, Pa., is expected to enter commercial operations in the first quarter of 2016. The 829-MW Patriot power plant, located near Williamsport, Pa., is expected to enter commercial operations in the second quarter of 2016.

By serving as the anchor tenant in the Sunbury Keystone Opportunity Expansion Zone (KOEZ), Hummel Station will also support additional investment at the site of the retired coal plant. “Our dream has been that Hummel Station will attract other industrial tenants to the KOEZ site being developed by our affiliate Arcova Development LLC,” Meehan said.

The state-of-the-art Hummel Station generating facility will utilize the latest, most advanced emissions-control technology, making it one of the cleanest natural gas-fueled power plants in the nation. While the new power station will supply 260% more power than the coal plant it replaces, key air emissions will be reduced by approximately 97%. The Hummel Generating Station will also use 97% less water for cooling purposes than the retired coal-fired Sunbury plant.

The existing ash basin and impoundment area will be closed under the Pennsylvania Department of Environmental Protection regulations. The Hummel project received its air permit from the Pennsylvania DEP in September 2014. The project has also received its water use and land development permits.

The generating station will be located on the west bank of the Susquehanna River in Shamokin Dam Borough, Pennsylvania. An engineering, procurement and construction contractor has not yet been selected. Construction will take approximately 30 months and will commence upon financing and other conditions.

Founded in 2010, Panda Power Funds is a private equity firm headquartered in Dallas, Texas that can develop, acquire, construct, finance and operate large scale, natural gas-fueled power facilities. Panda has two combined-cycle power plants in operation in Temple and Sherman, Texas, and four combined-cycle power plants currently under construction in Texas, Pennsylvania and Virginia with a combined capacity of more than 4,700 MW. Panda Power Funds also has an 859-MW power project in Southern Maryland in advanced development.

Sunbury Generation LP and its General Partner, Corona Power LLC, were formed in 2006 and acquired the coal-fired power plant assets at the Sunbury plant. Sunbury Generation partners include AMCI, JAZ Ventures LP and DALK Land LP.

UGI Energy Services is a subsidiary of UGI Corp. that markets natural gas, electricity and liquid fuels to approximately 19,000 business, commercial, industrial, institutional and government customers at approximately 43,000 locations in nine states and Washington, D.C. In addition, it stores and delivers natural gas and generates electricity.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.