Gas-fired power plant project in doubt after decision to forego state loan the governor questioned

Officials with a proposed natural gas power plant in Brooke County say they’ve decided not to complete a state-guaranteed loan a few weeks after the governor questioned the project.

“The external perception of a challenging climate in West Virginia has added to the difficult investment sector that changed drastically since the summer when the project initially approached the state’s development authority about a loan guarantee,” stated Brooke County Power CEO Drew Dorn.

The power plant would have become the largest consumer of natural gas in West Virginia.

The decision throws into doubt whether the project will go forward at all. Developers also cited challenging market conditions.

“The project is evaluating alternative options to move forward,” developers wrote in an announcement this afternoon.

The West Virginia Economic Development Authority in September unanimously approved a $5.5 million loan guarantee for the proposed power plant project.

That was supposed to be a final piece of financing for the project and meant as a sign of confidence by the state.

“The loan was to fund a letter of credit that guaranteed the interconnection improvements that the grid would need for the construction of the new natural gas power plant,” Dorn stated today.

There was a swirl of doubt before that, though.

Approval was originally set for a Aug. 20 board meeting, but the item was pulled from the agenda.

When asked about the project during a briefing about a week later, Justice questioned whether the gas would be produced in West Virginia and how many jobs the plant would support.

At the time, Justice said, “It’s not dead at all, but you expect me as your governor and our staff to be able to have things run to ground and questions answered. Now, it’s going to take some time. It’s not going to happen the day after tomorrow or the next day.”

The governor also questioned the need for the state loan.

“Why in the world if this project was valid and really a go, why would the powers-that-be be struggling and needing a state loan guarantee?” Justice said.

“In other words, you’ve got people who are perpetuating this and this is becoming the ultimate real estate with no money down. It doesn’t really make a lot of sense.”

Today, Brooke County power informed state and local officials that “due to changing conditions in the energy and financial markets, the company has decided that it is not prudent and in the best interest of all stakeholders including the state” to go ahead with accepting the state loan.





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