Plant Washington Takes Serious Blow as Investors Pull Out

Posted on September 22, 2009 by

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Cross Post from Cleanenergy.org, May 22, 2008

Over the past week, SACE has learned that 4 of the 10 electric membership corporations (EMCs) that came together to propose a coal-fired power plant near Sandersville, GA have dropped their involvement in the dirty coal plant.  With the 4 EMCs leaving the plan, the consortium, dubbed Power4Georgians, is now significantly hampered in its ability to get the necessary financial support for its multi-billion dollar coal plant.

The four EMCs that withdrew represented 50 to 55 percent of the total stake in the plant, said Chip Stewart with Cookerly Public Relations, which represents Power4Georgians.

p4g-logoThe plant proposal is in serious jeopardy unless the remaining EMCs up their stake in this risky project or Power4Georgians members sell their stake to others.

“I believe that the project is in serious trouble,” said Stephen Smith, executive director of the Southern Alliance for Clean Energy. The group plans to file a lawsuit if Georgia issues environmental permits for the plant, he said. But Smith said he remains concerned that Power4Georgians will stay alive just long enough to receive the state environmental permits, expected to be announced in draft form this summer. Then the enterprise could be sold at a larger profit, and another company could still build the plant, Smith said.

SACE applauds the EMCs that made the prudent and fiscally responsible decision to pull out of the proposal to build Plant Washington and urges the rest to follow suit.  As we demonstrated in a report  by Synapse Energy Economics, Plant Washington was based on false demand assumptions and faulty coal price projections.

Without any evidence of supporting analyses, Power4Georgians summarily rejects renewable alternatives as resource options because “many renewable energy technologies are still being developed and refined, they are substantially more expensive than coal on a per-kilowatt hour basis. Wind and sun may be free, but generating coal-plug1power from them is not.”  However, an analysis of estimated costs for both wind and biomass options show that they are not “substantially more expensive than coal” on a per-kilowatt hour basis, especially when the costs of carbon dioxide emissions are considered. Analyses by the U.S. Department of Energy also suggest that, over time, the costs of solar resources will come down and be competitive with the cost of generating power at new coal-fired power plants. . . contrary to the claims of Power4Georgians, there are a number of alternatives that could provide power at costs lower than Plant Washington.

Those faulty assumptions, combined with pending federal carbon legislation and increasingly unfavorable credit markets for coal plants exposed the EMCs and its members to considerable risk.  Gary Miller puts it best:

“Owning a coal plant at this point is more risk than we want to take,” said Gary Miller, president and CEO of GreyStone Power, which owned a 20 percent stake in the plant.

Unfortunately, Power4Georgians continues to promote falsehoods by arguing unrealistic annual energy demand increases when power demand is actually dropping for practically everyone.

EMC officials argue that they’ll need about 1,000 more megawatts of power by 2016 to keep up with a growing customer base that swells 5 percent every year.

However, this proposal has more issues than just poor math.  As we pointed out in an earlier blog post, the leaders of the proposal continue to be investigated for theft.  There’s good reason to believe that other EMCs didn’t want to be associated with the alleged corruption of Cobb EMC and the leaders of Power4Georgians.

Smith speculated that some EMCs are leaving partly because of the criminal investigation of Cobb EMC. Cobb Energy, a for-profit company under contract to run Cobb EMC, owns the company that is developing Plant Washington.  According to the Associated Press, Cobb EMC’s principal officers are the subject of a state and local investigation related to theft and racketeering at the cooperative.
“I think the fact that Cobb has so much controversy … has a real impact,” Smith said. “That’s just not the kind of business partner you want to be investing with.”

There’s no better way for the EMCs to clean up their image than to pull out of a shady deal and a dirty coal plant.

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