Construction of what would be one of Ohio’s largest natural gas-fired power plants has started in the heart of the Utica Shale, despite nuclear power subsidies set to take effect next year that have derailed other projects. 

Caithness Energy LLC and partner Apex Power Group LLC in late August said they have closed $1.6 billion of financing for the 1,875 MW Guernsey Power Station in Guernsey County’s Valley Township. Gemma Power Systems also has received a notice to proceed with construction.

The announcement comes after the state passed legislation in July providing $150 million of annual subsidies for seven years to the Davis-Besse and Perry nuclear power plants operated by FirstEnergy Solutions Corp. Since then, Clean Energy Future LLC has canceled plans for a $1.1 billion gas-fired facility in Northeast Ohio, and LS Power scrapped plans for a $500 million expansion at a dual-fuel facility near Toledo, citing the legislation. The natural gas industry, merchant power generators and other interests fought the subsidies for more than two years. 

Unlike the other projects, which were just getting underway, Caithness and Apex started submitting regulatory filings for the Guernsey Power Station in late 2016 after hinting at development. The project was initially slated to be online by next year. 

However, officials acknowledged in announcing the start of construction that development efforts for the large facility took longer than expected. Completion of the project, which would utilize locally produced natural gas, is now expected in 2022. 

The plant would sell power into PJM Interconnection. The project should create up to 1,000 jobs during peak construction and establish another 30 permanent jobs once operational. It would use three of General Electric Co.’s most advanced natural gas turbines, Caithness said. 

Caithness, which has developed and operated more than 40 power projects across the country, would operate the facility. Apex has developed other gas-fired facilities in California. 

Meanwhile, efforts to challenge Ohio’s nuclear subsidies at the ballot box are moving forward. After initially rejecting summary language, the state attorney general has approved a referendum to overturn the subsidies and the secretary of state has signed off on initial signatures. 

Ohioans Against Corporate Bailouts, an effort involving gas-fired power interests and others, now needs to collect more than 265,000 signatures by Oct. 21 for the initiative to appear on the November 2020 ballot. 

FirstEnergy filed a lawsuit in the Ohio Supreme Court on Wednesday to stop those efforts, arguing that monthly surcharges on customer bills to fund the subsidies are a tax not subject to referendum.