Power Finance & Risk:

LS Delays Longleaf Financing

LS Power is icing financing plans for its 1.2 GW Longleaf Energy Station in Early County, Ga., until next year as it appeals a state court ruling that has remanded the plant's permit. "We'd been hoping for financing this year, but it will most likely be next year," says Joe Esteves, managing director in New York. "We had to basically stop the EPC contracts right now. There's no sense in getting [banks] to come up with a firm bid when we can't act on it."

The development shop and its joint venture partner Dynegy had planned to arrange construction loans by this summer (PFR, 3/20). But last week, a Georgia Superior Court judge threw out the pulverized coal plant's permit on the grounds it did not limit carbon dioxide emissions. Referencing this ruling, schools and hospitals with boilers for heating may need to go through similar permitting requirements based on their emissions, says Michael Vogt, project manager in St. Louis.

"This has a substantial impact on the regulatory industry in the state of Georgia and broader if someone else were to take a similar construct that this judge took."

If the appeal is successful and financing is arranged next year, the plant would likely become operational in 2013 instead of the original target of 2012. But unlike previous project financings by LS for Plum Point and Sandy Creek,Longleaf will be fully contracted from the outset. "It should be very well contracted at the time of financing," says Esteves.

Judge Halts First Coal-Fired Power Plant Proposed in over Twenty Years in Georgia:

Public Health and Global Warming Concerns Prevail over Profits

Sierra Club appealed an EPD permit issued last May 2007 for a new coal plant in Early County Georgia. This plant would have emitted 9 million tons of carbon emissions in Georgia which is already 2nd in the nation, if built.

The judge affirmed all of our positions: EPD must consider CO2 as a pollutant, EPD must consider IGCC, an alternative means of producing electricity using coal, EPD must consider PM2.5 (fine), EPD must use licensed professional engineers when issuing such permits, the applicant Dynegy/LS Power and the administrative law judge used incorrect judicial review. Judge Moore is the first judge in the country to rule that CO2 must be limited from coal fired power plants.

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