Long-delayed Wyoming power plant near Wright could see construction next year

2013-03-07T23:00:00Z 2013-04-01T16:54:04Z Long-delayed Wyoming power plant near Wright could see construction next yearBy ADAM VOGE Star-Tribune energy reporter Casper Star-Tribune Online

The company planning an oft-delayed $750 million waste-coal-to-energy project near Wright could start construction in less than a year.

Two Elk Power Co., a subsidiary of Colorado-based North American Power Group, hopes to break ground on a new power generation plant in January. If that plan holds true, Two Elk could begin generating electricity in 2017.

"We’re still working on wrapping up some financing," company Vice President Brad Enzi said.

The company is planning a 300-megawatt power generation station about 15 miles southeast of Wright. The station would be fueled by waste coal from area mines that is deemed not suitable for export. Two Elk has at different times also considered adding biomass, wind and natural gas-fired generation projects to its on-site portfolio.

Enzi said the plant would be outfitted with the "newest" emissions controls and could also include carbon capture and sequestration equipment, although the carbon equipment isn't included in the estimated project cost.

Two Elk executives expect to announce an updated schedule for the project at an April 1 meeting of Wyoming's Industrial Siting Council. According to Industrial Siting Division Administrator Luke Esch, the council will then decide whether the updated schedule would add to existing "adverse impacts" of the project.

Esch declined to comment on the viability of the project, saying only council members make judgments.

If the council allows the project to move forward, it will be the latest step in a plan with a long history and many local doubters.

Two Elk was first proposed in the 1990s. Because the plan for the generating plant includes use of "waste" coal -- product that doesn't live up to utilities' standards and would normally be reburied -- the project qualified for tax-exempt and county-sponsored industrial revenue bonds totaling more than $440 million, according to previous Star-Tribune reports.

The company has undertaken some construction work at the site to keep its permitting and bonds up to date -- including the pouring of a foundation and paving of a gravel road to the site. But in 2011, the Internal Revenue Service recommended the bonds lose their tax-exempt status because of a lack of progress on the facility. Enzi said the company now pays taxes on those bonds.

The project was sued in 2007 by the Sierra Club, which claimed that the company hadn't continued construction recently enough after a Wyoming Department of Environmental Quality permit was issued. The case was dismissed on appeal in 2011.

Intermittent and piecemeal construction has continued on the project since.

"We’ve been kind of doing things a little bit at a time for last five or six years," Enzi said. "We're putting in different pieces as we can."

Perhaps the largest obstacle in Two Elks' way has been financing. North American Power Group doesn't have the money to fully back the project and has had to look elsewhere.

"When you start moving past the hundreds of millions of dollars mark, there’s only a few guys in the world that have that checkbook," Enzi said.

Five years ago, the company was close to fully financing the project, but interest waned in the face of a nationwide economic downturn.

"We went from everybody and their dog was interested in financing in 2008. Then the market collapsed and half the people dropped out," Enzi said.

The company in 2009 obtained about $9 million in stimulus funding, which was used in carbon capture and sequestration research. Enzi said the company completed the first phase of the project but decided not to move on due to a lack of interest.

Two Elk has since worked to rekindle financial interest in the project. Enzi didn't offer a timeline for financing the project, but said construction would take about 40 months whenever it commences.

Financing the project remains "tough," but Enzi is optimistic.

"I’d love to paint you a picture that everything smells like roses in the power industry, but that’s not it," he said. "It’s certainly gotten better the last five or six months.

"I still come to the office every day and fight like heck. I have to be optimistic that it’s going to go."

Reach energy reporter Adam Voge at 307-266-0561, or at adam.voge@trib.com. Read his blog at http://trib.com/news/opinion/blogs/boom or follow him on Twitter @vogeCST.

Copyright 2015 Casper Star-Tribune Online. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(1) Comments

  1. Pops
    Report Abuse
    Pops - March 08, 2013 9:54 am
    "Adverse impacts" of the project. This triggers my alarm system.
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