Published: September 04, 2008 12:00 am      

Co-Gen project funding cut off

RAINELLE — A Western Greenbrier Co-Generation official is blaming the Bush administration for cutting federal funds and ending dreams of building a $416 million coal-fired electric plant.

Co-Gen manager Wayne Brown said the Department of Energy notified him by letter June 16 that funding for the 96-megawatt project had been cut. However, “we did not agree with their decision,” he said by phone Wednesday.

When asked why the DOE cancellation letter had not publicly been announced after repeated media inquires concerning federal funding, Brown said other financing alternatives were being sought at the time.

“We got notification on June 16 that it had been canceled, but we had been continually suggesting other alternatives,” Brown said. “We can’t finance the project without the DOE’s help. However, we had been continuously pursuing a financing package that was still an open item.”

DOE spokesman Joe Culver says the project wasn’t likely to succeed.

The project, which would have created electricity from burning coal refuse known as “gob,” was owned by the cities of Rupert, Rainelle and Quinwood.

“In the June 16 letter, the DOE’s primary reason for cutting funding was because in their judgment we were not likely to be able to finance the project,” Brown said.

Earlier this year, Brown and others held a news conference saying $25 million was needed to keep the project afloat. A letter was sent to Sen. Robert C. Byrd, D-W.Va., pleading for financial help, but a response was not reportedly returned.

Brown said roughly $16 million had already been spent on the plant, chiefly for its design and permitting applications. Salaries, he said, were a “small” percentage of the $16 million. Of that, $8 million was composed of federal funding, $5 million was through a loan with the state and the rest was “deferred employee compensation.”

“What’s left to be paid to the state by Co-Gen is $5 million,” Brown said. “The loan had been defaulted on, but the state replaced it. We are still responsible for that loan.”

Environmental lawyer Derek Teaney, an Equal Justice Works Fellow for the Appalachian Center for the Environment in Lewisburg, said the plant’s death will mean cleaner air for the Greenbrier Valley. Teaney represents Cleanbrier, which emerged as the leading environmental voice opposed to the project.

“The goal was to protect the air quality of the Greenbrier Valley and stopping the plant does just that,” Teaney said by phone Wednesday. “We are glad to see the DOE recognized the folly in pursuing the plant. What happened here is the market decided it wasn’t interested in funding coal-fired power plants and it recognized that is not the way of the future.”

Teaney said the DOE made the right call in eliminating funding for the project.

“I think they realized the project was not proceeding on schedule,” Teaney said.

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Brown said a news conference would be scheduled early next week to explain why the project was pulled. When the $215 million project was announced five years ago, Energy Secretary Spencer Abraham visited Rainelle, telling residents the plant would create 6,000 jobs, with federal funds contributing $107 million. Many in the community, including Brown, felt the plant could be the economic savior of the western end of the county that’s been stifled for years since the closure of key coal and lumber operations.

Since then, estimated building costs for the plant skyrocketed to $416 million, leaving Co-Gen officials scrambling for ways to fund construction. Officials estimated 1,000 construction jobs and 50 full-time jobs most likely would have been produced. Brown blamed the Co-Gen’s failure on the Bush administration and called the process a “very destructive political game.”

“The Bush administration is playing games. Why did it take five years for the Decision of Record to be announced?” Brown asked. “Why were there so many delays? There’s no sensible answer to that and there’s no rational reason for that process to have taken that long. It was a very destructive political game.”

Brown also said efforts by environmental groups “had an influence” on the death of the project, but he squarely placed the blame on the Bush administration.

“They had other places they wanted to spend that money. Plain and simple,” he said. “It was a game that squandered $16 million and that should not have happened. We are going to explain all that.”

Brown said Co-Gen officials have scheduled a meeting today and will continue exploring private funding of the project.

— E-mail: cgiggenbach@register-herald.com