ODEC Goes for Gas to Meet Rising Customer Demand in U.S. Mid-Atlantic

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Strong customer growth and low natural gas prices have convinced Old Dominion Electric Cooperative (ODEC) (Glen Allen, Virginia) to build a 1,000-megawatt, $675 million NGCC (natural gas, combined-cycle) generator in Cecil County, Maryland.

ODEC, an electric generation and transmission (G&T) cooperative, provides wholesale power to 11 electric cooperatives in Maryland, Virginia and Delaware. Construction of the Wildcat Point Generation Station is scheduled to begin in mid-2015. The plant, which will be built adjacent to an existing ODEC generator, is expected to begin generating electricity in mid-2017, Shena Crittendon, ODEC's director of communications & public relations, told Industrial Info. The G&T cooperative awarded Mitsubishi Power Systems Americas Incorporated (Lake Mary, Florida) a contract to provide two gas-fired turbines and associated electric generators to Wildcat Point.

The cooperative is reviewing proposals from five firms bidding for the engineering, procurement and construction (EPC) work. Crittendon declined to name the firms. She said a selection announcement for an EPC firm would be made this year.

Over the last 10 years, ODEC's electricity sales have increased 26%, well above the national average, the G&T said. It expects member demand for electricity to continue rising, necessitating the construction of Wildcat Point. ODEC provides electricity at wholesale to 11 member cooperatives, who in turn serve about 550,000 customers living in 70 counties in Maryland, Virginia and Delaware.

In seeking permission from Maryland regulators to build Wildcat Point, ODEC noted that "Maryland's power plant fleet is aging and unable to meet statewide energy needs. Maryland imports 42% of its power, making it the fifth-largest energy importing state in the U.S." In addition, Maryland has a relatively old generation fleet: About 66% of the electricity generated in Maryland comes from power plants that are at least 30 years old, ODEC said.

"Our region needs new sources of cost-effective, reliable and environmentally balanced electricity," said Lisa Johnson, ODEC's senior vice president and chief operating officer, in a statement.

Crittendon said that the plant's output would go to OPE's members. Wildcat Point would not operate as a merchant facility, selling power into the broader market. Unlike some utilities in the Mid-Atlantic area, ODEC is not facing the premature closure of coal-fired generators due to tougher environmental regulations, she said. For more on that issue, see December 12, 2013, article - New Turbine Technology, Environmental Concerns Drive Development of Maryland NGCC; September 6, 2013, article - Second Large NGCC Plant Wins Permits from Pennsylvania Regulators; and July 10, 2013, article - FirstEnergy Announces Planned Closure of Two Coal-Fired Plants.

The ODEC spokeswoman added that plans to build Wildcat Point were not driven by the co-op's decision to stop developing a coal- and biomass-fired base-load plant in Surry County, Virginia. ODEC had been developing the Cyprus Creek Power Station, which was sized at between 750 and 1,500 MW. But that project was placed on hold indefinitely a few years ago, due to uncertainty about future regulation of power-plant carbon dioxide (CO2) emissions. ODEC planned to install carbon capture and sequestration (CCS) equipment at Cyprus Creek, which pushed its total investment value (TIV) in that project to about $3.5 billion.

"Recent EPA regulatory developments, low natural gas prices and slower growth in the demand for electricity stemming from the economic downturn have changed the power supply landscape," Crittendon said. "The decision to build Wildcat Point was not contingent on Cypress Creek being on indefinite hold, but rather the continuous efforts of ODEC to meet our members' needs."

"It's certainly nice to see good, old-fashioned economic growth, rather than environmental regulation, driving the need for new power plants," Brock Ramey, Industrial Info's research manager for North American Power, said in an interview.

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