CALP: Background Information on GenPower's Longview Coal-Fired Power Plant
WE CAN DO BETTER THAN LONGVIEW!
What is the project?
The proposed Longview Power plant is a 600-megawatt, coal-fired electric station. The developer is GenPower LLC, a Massachusetts company. It would use an updated version of the traditional pulverized coal boiler. The plant site is located in Monongalia County in the community of Fort Martin near Morgantown, West Virginia approximately one mile west of Allegheny Energy's existing Fort Martin plant and approximately one mile from the Pennsylvania border (see map). Water is supposedly to be extracted from underground ''mine pools'' in Pennsylvania and transported in a pipeline along a 4-mile long conveyor belt that will transport coal from Pennsylvania mines to the proposed plant. The plant is expected to cost approximately $940 million to build and would employ about 50 workers after it is completed. GenPower / Longview Power was hoping the plant could be operational by 2007, but that looks unlikely.
Who is GenPower?
GenPower, LLC is a Massachusetts-based, private company formed in 1999 from Genesis Power. GenPower develops electric generating plants through the design and permitting stages. Because it has a limited asset base, GenPower arranges external financing with a large developer/partner. GenPower then "sells" the design, permits, and financing package to another firm who actually builds and operates the plant. Once construction begins, GenPower is gone from the project.
If this project reaches completion, it will be GenPower's first coal-fired power station. The company has plans for another coal-fired plant in McDowell County, West Virginia. GenPower has arranged gas-fired merchant power stations in the past, but most of them have been halted before completion. One plant is in operation in Westbrook, Maine.
Electricity from Longview would not be sold directly to consumers; it is a so-called merchant power plant and its output is "put on the grid" (bought by utilities on the wholesale market). West Virginia produces far more electricity than it consumes (see FAQs page).
What permits does the project need?
To operate, electric generating plants must obtain a permit from the state Public Service Commission (PSC). Longview must also obtain a permit from the PSC to construct its approximately 3.5-mile-long transmission line. The PSC is currently reviewing Longview's permit applications and will hold a public hearing on March 31, 2004 (see the Updates page for details).
The plant must also obtain a permit to emit air pollution. This Prevention of Significant Deterioration (PSD) Permit was granted by the West Virginia Department of Environmental Protection (DEP), Division of Air Quality (DAQ) in March 2004. Please see the Updates page for details and for links to the permit and permit application.
If wastewater is to be discharged into the Mon River or other surface waters, a permit for that will be required as well. GenPower has said it plans to recycle all water on site and is aiming for "zero discharge" of wastewater to surface-water bodies. Any wastewater discharged into streams or lakes must be treated to certain standards.
Ash recovered from the plant will be landfilled near the existing ash landfill used by Allegheny Power's Fort Martin Power Station. Depending on the content of the ash, the landfill may not, and likely will not, be required to have a liner! This has potentially serious consequences for ground-water quality.
Constructing the plant does not need approval from Monongalia County or other local bodies. However, Longview Power / GenPower has indicated that it does not want to pay regular property taxes, but rather, it wants reduced payments in lieu of taxes (PILOT). Such an arrangement was approved by several local bodies. (See the following section for details.)
How does the PILOT tax break work?
If Longview were built and taxed like any other industrial property, it would be liable for up to $9 million in annual property taxes, by GenPower's own estimate. GenPower insists the project is not economically viable if these taxes had to paid, but no financial documents to this effect are in Monongalia County files. GenPower insisted that the County agree to pre-established payments in lieu of taxes (PILOT), or else it threatened to cancel the project.
GenPower and representatives of Monongalia County agreed to the following payment schedule for the PILOT scheme:
An official PILOT agreement was finalized in June 2003.
Where will the money go?
The Monongalia County Commission will receive a portion of the PILOT payments from Longview (approximately 22%). The remainder theoretically goes to the School Board, but at least a portion of that sum, if not all of it, must pass through the State Aid Formula. Therefore, Monongalia County schools will not receive the entire amount of the remainder, or the State's contribution to the County's schools will be offset accordingly.
Is it true that Monongalia County would be Longview's legal owner?
A PILOT deal is legal only if the property is owned by a public entity. The Mon County Development Authority presently owns the land which Longview wants for the power plant. A shell game will ensue whereby the property passes briefly among several hands and then to the County Commission. The Commission will lease the plant and property to the operator company, which will not be GenPower. At the end of the lease/PILOT period, according to an agreement-in-principle with GenPower, the facility's legal ownership would pass to the Longview operating company, which would then pay ordinary property taxes.
What county officials must approve the PILOT deal and lease agreement?
According to state law, the County Commission and Board of Education (BOE) must approve any PILOT in separate votes. GenPower has requested that the County Assessor and County Sheriff also sign the PILOT agreement, due to their roles in determining and collecting taxes, respectively, although there seems to be no legal requirement for this. Additionally, the Mon County Development Authority (MCDA), the current owner of the Longview site, must sign the ownership and lease agreements, but not the PILOT.
To provide some coordination among these groups in negotiations, the MCDA established a "Special Projects Committee" to include representatives from each group. These representatives include County Commission member John Pyles; Stephen Cook and Nancy Walker of the BOE as well as officials from the superintendent's office; MCDA's executive director (Don Reinke) and MCDA board members Paul DeVore and Tom Witt; lawyers for MCDA and BOE; and Assessor Rodney Pyles. Other officials from these bodies have sometimes attended either in addition to or in place of the "official" members. The group's meetings have been open to the public though without much prior publicity. Since April 2003, these meetings have been carried out largely in "executive session," barring the press and public.
It is CALP's understanding that State law requires the County Commission to hold a formal public hearing on a final PILOT agreement before it can take effect; however, a hearing specifically for the final PILOT agreement was never held. The Commissioners feel that the public hearing held in March 2003 (well before a final PILOT agreement was reached in June) were sufficient.
What is the project's status?
Please refer to our Updates page for a chronology of events (newest at the top).
Where is more information?Web sites:
WE CAN DO BETTER THAN LONGVIEW!