Fayetteville PWC Ditches Deal with SCANA in NC
A little over a month after SCANA Corp. announced it had entered into
an agreement with the Fayetteville Public Works Commission (PWC) to jointly
build and own a natural gas-fired 500 MW power facility in Fayetteville,
NC, the company reported that the deal is dead.
The general manager of Fayetteville PWC recommended that the city withdraw
from the deal unless SCANA agreed to assume a greater portion of the potential
financial risk in the event that the project could not be completed on
time. SCANA refused to budge, and the city voted last Monday to pull out
"We indicated to the PWC and City Council our belief that this
project could be completed on time and on budget, so we are certainly disappointed
in Monday's decision to not go forward," said Berry Gibbes, president
of South Carolina Pipeline Corp., SCANA's natural gas transmission subsidiary.
"This project was proposed as a 60-40 partnership from the beginning.
Unfortunately, the PWC took a pessimistic view of the regulatory risk and
potential time delays, which in the end, affected their confidence."
SCANA entered an agreement with Fayetteville PWC on Nov. 10 to construct
and co-own the proposed $265 million power facility. Under the agreement
the PWC would own 60% of the plant, and SCANA would take a 40% share. Additionally,
SCANA agreed to build a 106-mile gas pipeline lateral to attach to the
company's existing line in South Carolina. The pipeline, estimated to cost
$90 million, was to be owned and funded exclusively by SCANA (see NGI,
"It was a difficult decision for them to make. And while we regret
their decision, we respect and accept it. This was a great opportunity
to ensure a reliable, low-cost supply of electricity to meet Fayetteville's
growing demand for energy, while at the same time introducing a valuable
second source of firm natural gas transmission capacity into eastern North
Carolina that could have supported future economic development in that
part of the state," said Gibbes.
SCANA said it received written notification of termination of the agreement
"We put together a strong team and a strong proposal. We will continue
to look for other opportunities to expand our natural gas pipeline system
to ensure adequate supplies to growing gas markets in South Carolina and
North Carolina," said Gibbes.
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