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Construction gears up at Nelson power plant

Several taxing bodies stand to benefit from project

Published: Saturday, April 5, 2014 1:15 a.m. CST

NELSON – Construction is underway at the Invenergy power plant in Nelson.

The facility is scheduled to go online in the first quarter of next year. Several trade unions are supplying workers for the construction site, said John Thompson, president and CEO of the Lee County Industrial Development Association.

“They are hired largely through the local building trade unions,” Thompson said. “Whether they are local people depends on where the offices are located and which union shops have waited the longest.”

Groups of up to 200 workers have been at the site at 1311 Nelson Road, south of Rock Island Road.

The 584-megawatt plant has officials in both Lee and Whiteside counties excited about the tax revenues it will bring. Although the plant probably won’t be fully assessed until the end of 2016, when it is, it could become the biggest taxpayer in Lee County, Thompson said.

The Lee Energy Facility, operated by Duke Energy in Nachusa, is now the county’s largest taxpayer. Duke is now looking for a buyer for 13 of its Midwest power plants, including the Nachusa facility.

Although Thompson said it was too early to estimate numbers for the Nelson plant, the tax value on the Nachusa operation is $31 million, which has the company paying about $300,000 a year to the county. The tax value on the Nelson plant is expected to far surpass that of the Nachusa property.

Schools also stand to be big winners when the plant is on the tax rolls.

“About 85 percent of that would go to school districts,” Thompson said. “It’s basically the same group of taxing districts as for the old National Manufacturing building.”

Those districts would be Rock Falls High School, East Coloma-Nelson Elementary, Sauk Valley Community College, County of Lee, Nelson Township, Nelson Highway Department, Rock Falls Fire Protection, and multiple Nelson and Harmon township entities.

The fire department’s stake in the plant is twofold, said Gary Cook, chief of the Rock Falls Twin City Joint Fire Command.

“The Rock Falls rural district is a tax beneficiary, so it’s obviously going to be a good thing for us down the road, especially for the capital budget,” Cook said.

The plant’s water supply also will be made available to the fire department.

“They will be a fill site for us,” Cook said, “which will be nice because National [Manufacturing] used to be a site for us, and we haven’t had them for a while.”

The facility will be a combined-cycle plant with its own water system. It will have two gas-fired turbines that turn the generators. The exhaust gas goes through a heat exchanger, where it is cooled by water. The high-pressure stream created runs the second turbine, allowing for two generation cycles from just one fuel stock.

The project site, an abandoned power plant at 1311 Nelson Road, south of Rock Island Road, has seen two owners begin work since 2001. NRG Energy bought the 165-acre lot to build a gas-fired electrical power plant. NRG, however, filed for bankruptcy protection in 2003 before completing the project.

Invenergy bought the property in 2006, with plans to use ethanol and natural gas to generate electrical power. At that time, the company said the plant would create 70 jobs. When plans for the ethanol portion of the project were scrapped, that number was reduced to an estimated 20 to 25 jobs.

Some of the jobs are now posted on the company’s website.

The technology at the Nelson plant is much different from the Duke plant in Nachusa, officials say.

“The Nelson plant is much more efficient than the Duke plant,” Thompson said. “Nachusa is what’s called a peaker plant, and it only operates where there is high demand for electricity.

Invenergy wants waiver from FERC

The Nelson Invenergy plant now under construction is seeking a waiver that would allow the plant to sell some of its energy to a Wisconsin-based regional supplier.

Invenergy has filed with the Federal Energy Regulatory Commission to get partial exemption from a requirement that all of the Nelson plant's energy produced in the 2017-18 delivery year go to PJM Interconnection, the world's largest wholesale electricity market. It fuels the grid for several states in the Midwest and Mideast.

Invenergy believes it qualifies for a waiver because an exception to the PJM agreement can exist when the producer has a "financially and physically firm commitment to an external sale of its capacity".

On March 12, Nelson and WPPI Energy drew up an agreement that says WPPI will buy 15.6 percent of the Nelson facility's output for a 20-year period, beginning June 1, 2017, the beginning of the 2017-18 delivery year.

PJM opposes the waiver because it says the Nelson plant did not enter into the agreement with WPPI until 2 months after the deadline.

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