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Talen Greenlights $70M Project to Build Pipeline, Co-Fire NatGas at Pennsylvania Power Plant

After completing a feasibility assessment, Talen Energy Corp.'s board of directors has approved a $70 million project to modify the company's Montour power plant in Central Pennsylvania to co-fire natural gas.

Talen said it would install boiler modifications to enable dual-fuel ability at the 1,500 MW coal-fired plant, which entered commercial service in 1972 and currently generates enough electricity to power one million homes in the PJM Interconnection market.

The facility is located in Washingtonville in Montour County near the Marcellus Shale's northern tier.

"Montour is a significant asset in the Talen Energy fleet and we are making the necessary investments to improve its competitive position in the market," said CEO Paul Farr. "The Montour plant is located in close proximity to one of the largest natural gas formations in the world, the Marcellus Shale. Co-firing the plant to burn natural gas produced in Pennsylvania enables Talen Energy to leverage the strategic location of the plant."

The company is also in the process of selecting a third party to build, own and operate a 15-mile lateral pipeline to bring natural gas to the Montour plant. Talen said the $70 million price tag to convert the facility to dual fuel would not include pipeline expenses and payments to the midstream company. Any third party selected by Talen to supply the plant with gas would be responsible for obtaining all necessary environmental and construction permits.

Talen said it plans to make more information available as the project moves forward.

Earlier this month, the energy- and power-focused private investment firm Riverstone Holdings LLC agreed to acquire Pennsylvania-based Talen and its 16,000 MW of electric generating capacity in eight states in a deal valued at $5.2 billion (see Daily GPIJune 3). All outstanding shares of Talen common stock would be acquired for $14 each by Riverstone, which already owns 35% of the company's common stock. Both parties expect the transaction to close by the end of the year, pending regulatory and stockholder approval.

Talen owns or controls 24 power plants that are primarily located in Northeast, Mid-Atlantic and Southwest states. Most of those facilities generate power with natural gas, while a smaller portion use coal or natural gas and oil.

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