By Christian Giggenbach
Register-Herald Reporter
March 04, 2008 11:10 pm
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CHARMCO — A Western Co-Generation official pleaded for public support Tuesday night in asking Sen. Robert C. Byrd to bail out Rainelle’s proposed coal waste-fired electrical plant because the project’s financing bank has asked for an additional $25 million for the project before issuing any bonds.
About 100 citizens braved rainstorms to listen to Co-Generation manager Wayne Brown field questions about the financially troubled project. Brown told the audience that after a series of delays, construction costs for the plant have skyrocketed from $215 million to $416 million, and without another $25 million by this summer, the project “would not be able to continue in its present form.”
The request specifically came from the Western Greenbrier Business Development Corp., which issued about 100 audience members letters and petition forms they hope will be signed and eventually sent to Byrd, who is recovering from a recent fall and a urinary tract infection.
“Your leadership and support have been instrumental in the near completion of the planning phase and we are now asking for your further leadership,” the letter, signed by development president William Shiffer and chairman Ralph Williams, states. Williams also stated the project was in a “crisis.”
Shiffer said the project’s bond financier, Citigroup, increased the debt service ratio from 1.85:1 to 2:1 after the project could not secure a long-term buyer for the electricity. The plant now plans to sell the electricity on the open market.
Because the plant must now have $2 of revenue for every $1 financed through bonds, the bank has requested an additional $25 million in capital. Shiffer said the plant needs a yearly revenue of $66 million to cover its anticipated debts.
The plant, which would use coal waste as fuel, is projected to produce 100 megawatts of electricity per year and could also have spin-off businesses from the mass amount of steam generated.
“Although some improvement in bond interest rates is expected by our target closing date in May, Citigroup believes that we must boost our capital account by at least $25 million to achieve an acceptable bond debt repayment ratio,” the letter states. “Efforts by the project management team have not been successful in meeting this requirement; therefore, we request you schedule a meeting at a time and a place of your choice for the purpose of identifying possible solutions to resolving this shortfall.”
The letter also “recommends and requests” that both Gov. Joe Manchin and Congressman Nick Rahall be present for the meeting.
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Brown said WCG, which is owned by the municipalities of Rainelle, Rupert and Quinwood, is ready to employ more than 1,000 people during its construction phase and have up to 125 permanent jobs, but all of that could be lost if the extra $25 million is not put in the coffers.
Brown said most of the bureaucratic hurdles have been met, including air permits, but the all-important Environmental Impact Statement has not been officially issued by government officials. Brown, who is now the only full-time WCG employee, did not immediately have an answer as to why, but discounted any “conspiracy” against the project.
“If we do not get the additional $25 million,” Brown said, “the project will not be built in its present form. I’m not saying that it won’t be built, but not in this manner.”
— E-mail: cgiggenbach@register-herald.com
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