February 4, 2019

CT Construction Digest Monday February 4, 2019

State to take up power plant project
John Penney
KILLINGLY — The Connecticut Siting Council this month will again take up a developer’s motion for an application to build an energy plant in Dayville.
NTE Energy on Jan. 18 filed a motion with the council to reopen and modify a 2017 decision by the state agency to deny the company a certificate of environmental compatibility and public need.
The agency rejected NTE’s application in May 2017 “without prejudice,” meaning although the company did not demonstrate a public need for the planned 550-megawatt combined cycle plant off Lake Road, developers were free to reapply in the future.
In testimony to the council, NTE Senior Vice President Timothy Eves said since 2017 the company has obtained air permits from the state Department of Energy and Environmental Protection and increased the proposed Killingly Energy Center’s power input to 650 megawatts.
Eves told the council the output increase would be made with “essentially no additional cost” to the $500 million project price tag.
“And no material change to the project footprint or the environmental effects associated with the (Killingly Energy Center) Facility improvements,” Eves said, according to testimony documents.
The Siting Council will consider NTE’s re-filing motion on Feb. 14.
Eves said water supply and gas pipeline upgrade agreements are now in place and the company has pre-qualified to participate in the upcoming ISO New England forward capacity action.
Another key change since 2017 was the Killingly Town Council’s decision a year ago to approve tax stabilization and Community Environmental Benefit, or CEBA, agreements. The contracts stipulate that if controversial power plant is built — various environmental coalitions and state lawmakers have opposed the project — roughly $95 million in tax revenue and cash would flow into the town’s coffers.
After months of negotiations with town officials, NTE representatives in early 2018 agreed to increase its initial $2 million CEBA proposal to $5 million. That “unrestricted” money could be used for a variety of environmentally oriented projects, including a scholarship fund, for water testing at Alexander’s Lake and to plant trees throughout town.
A revised tax stabilization agreement calls for $91 million — up from $90 million — in revenue to be paid to the town over 20 years with more paid out in the early years of the contract.
But Acting Town Manager Paul Hopkins said the company’s decision to up the planned plant’s output will likely mean more money for the town.
“There’s escalator language in those contracts that if the megawatts increased, so would the amount we’d receive in taxes,” he said.
Hopkins said the town’s role in the project essentially ended with the formalization of the agreements and the plant’s fate remains in the hands of the siting council.
“There’s still a lengthy process ahead,” he said. “The company would have to be selected to provide energy at this month’s auction, get siting council approval and actually build the plant before we’d look to reexamine how much in taxes we’re due. I don’t expect to see any money from this for quite some time.”