Blackstone in talks with power plant
BLACKSTONE — Town officials sat down for the first time Wednesday with the new owners of the former International Power America (IPA) of Blackstone to discuss a 10-year extension of a payment-in-lieu-of-taxes (PILOT) agreement between the town and the power plant.
A negotiating team made up of Selectmen Chairman Daniel Keefe, Town Administrator Daniel M. Keyes and Town Counsel Patrick Costello have started preliminary talks with Plant Manager Jeff Stewart and representatives of Dynegy, Inc. which recently acquired global energy and services provider ENGIE’s United States portfolio – including IPA in Blackstone – for a total purchase price of $3.3 billion.
That acquisition, which was finalized back in February, also included the NEA Bellingham cogeneration and ANP Bellingham power plants in Bellingham and the Milford Power LP in
Milford.
The town’s 20-year agreement PILOT agreement with the power plant, which was brokered back in the 1990s when the Elm Street power plant was built, is set to expire in three years and the selectmen are hoping to extend the agreement by 10 years by the time it expires in 2020.
At a selectmen meeting Tuesday, Keyes expressed confidence that a new deal will be hammered out.
“This is a new company that has taken over the plant and in the next few months we are hoping to report back to this board and to the residents of town some good news that we will be extending our relationship with the plant,” he said.
Selectman Robert J. Dubois said there are some people in town concerned that the power plant is going to pack up and leave when the agreement expires in 2020.
“Contrary to the rumors circulating out there, the power plant intends to stay in Blackstone and hopefully we can iron out an agreement,” he said.
Any agreement extension would need to be ratified by voters at a town meeting.
Instead of the plant paying taxes directly into the general fund, the PILOT agreement ratified by town meeting voters back in the 1990s allows the money – about $2.1 million annually through fiscal year 2020 – to be placed in a capitol investment fund that was approved by special legislation. Over the years, that fund has been used to fund projects like water sewer infrastructure, road improvements – even a new library.
Currently, the town has a formal long-range plan that balances most of its capital project needs and existing debt service annual payments with projected PILOT funds through 2020.
The Blackstone facility – initially owned and operated by American National Power – is a 570-megawatt power plant utilizing two gas turbines that employ sequential combustion technology to reduce nitrogen oxide emissions, compared to traditional power plants.
The plant consists of two single-shaft designed, combined cycle units, each of which consists of a gas turbine, heat recovery steam generator and steam turbines that are combined together in a system that produces electric power at a much higher efficiency than is possible with each system operating independently.
The Blackstone plant effectively limits its water usage by using air cooled condensers instead of conventional cooling towers with spray water.
Construction on the plant began in 1999, and has been in successful commercial operation since 2002.
Dynegy’s portfolio consists of 9,017 megawatts of generation capacity, more than 90 percent of which is gas-fueled. The plants are located in the Texas ERCOT, PJM and ISO-New England markets. Wit the addition of the ENGIE asset portfolio, Dynegy now owns more than 31,000 megawatts of low-cost generating capacity – enough to power 25 million homes.
The ENGIE transaction adds efficient assets that enhance Dynegy’s existing portfolio in PJM and ISO New England, and diversifies the Company’s geographic markets by establishing a new presence in the Texas ERCOT market. The predominantly gas-fueled ENGIE portfolio increases Dynegy’s overall natural gas-fueled capacity to nearly two-thirds of its total generation.
“Contrary to the rumors circulating out there, the power plant intends to stay in Blackstone and hopefully we can iron out an agreement.” —Selectman Robert J. Dubois