1 billion dollar coal power plant delayed by dispute over line

CHARLESTON, SOUTH CAROLINA - The construction of a nearly $1 billion coal-fired power plant is being held up by a dispute with an existing electricity generator over a transmission line, according to a complaint filed with the Federal Energy Regulatory Commission.

Longview Power LLC alleges that Allegheny Energy Inc. is blocking access to its 500-kilovolt Fort Martin Substation in violation of regulations set by FERC and regional power coordinator PJM Interconnection LLC.

"Allegheny's intransigence, if not hostility, to both the commission's and PJM's interconnection requirements, which appear to be driven by its desire to protect its own generating facilities, has severely hampered Longview's interconnection efforts," according to the complaint.

The state Public Service Commission conditionally approved the new power plant on Aug. 27, ruling that Longview must obtain a certificate for transmission lines before construction can begin.

"Without an agreed-upon option to interconnect to the Fort Martin Substation, Longview will be unable to obtain financing for or begin construction of its proposed generating facility," the company said in its filing.

The Longview site is located adjacent to Allegheny's 1100- megawatt Fort Martin Power Station near Morgantown.

Allegheny wants at least $5.5 million for the transmission line, arguing that the Longview line would run through a proposed ash landfill on the Fort Martin property. But FERC and PJM rules "require a transmission provider to grant access at no cost to a generator for the construction, operations and maintenance of interconnection facilities," Longview said.

A spokesman for Allegheny declined to comment, citing pending litigation.

Longview, a subsidiary of Needham, Mass.-based GenPower LLC, has said the plant would employ about 60 people and create up to 1,600 construction jobs. When completed, the plant would use more than 2 million tons of coal a year.

All of Longview's 600-megawatt output is slated for the wholesale electricity market outside West Virginia, while about 25 percent of the Fort Martin plant's generation currently heads to state consumers. Allegheny also owns five other power plants within 30 miles of the Fort Martin and Longview sites.

As part of a plan to have state consumers pay for the installation of environmental controls known as scrubbers at Fort Martin, Allegheny is in the process of directing all the plant's production to the West Virginia market.

Greensburg, Pa.-based Allegheny needs the guaranteed funding to receive an optimal credit rating. Otherwise, less favorable loan conditions and interest rates could more than double the estimated $400 million cost for the four-year project, according to the company.

Longview has requested that the commission resolve the complaint by June 4.