A little over a month after SCANA Corp. announced it had enteredinto an agreement with the Fayetteville Public Works Commission(PWC) to jointly build and own a natural gas-fired 500 MW powerfacility in Fayetteville, NC, the company reported that the deal isdead.

The general manager of Fayetteville PWC recommended that thecity withdraw from the deal unless SCANA agreed to assume a greaterportion of the potential financial risk in the event that theproject could not be completed on time. SCANA refused to budge, andthe city voted Monday to pull out of negotiations.

“We indicated to the PWC and City Council our belief that thisproject could be completed on time and on budget, so we arecertainly disappointed in Monday’s decision to not go forward,”said Berry Gibbes, president of South Carolina PipelineCorporation, SCANA’s natural gas transmission subsidiary. “Thisproject was proposed as a 60-40 partnership from the beginning.Unfortunately, the PWC took a pessimistic view of the regulatoryrisk and potential time delays, which in the end, affected theirconfidence.”

SCANA entered an agreement with Fayetteville PWC on Nov. 10 toconstruct and co-own the proposed $265 million power facility. Underthe agreement the PWC would own 60% of the plant, and SCANA would takea 40% share. Additionally, SCANA agreed to build a 106-mile lateralpipeline to attach to the company’s existing line in SouthCarolina. The pipeline, estimated to cost $90 million, was to be ownedand funded exclusively by SCANA (see Daily GPI, Nov. 13).

“It was a difficult decision for them to make. And while weregret their decision, we respect and accept it. This was a greatopportunity to ensure a reliable, low-cost supply of electricity tomeet Fayetteville’s growing demand for energy, while at the sametime introducing a valuable second source of firm natural gastransmission capacity into eastern North Carolina that could havesupported future economic development in that part of the state,”said Gibbes.

SCANA said it received written notification of termination ofthe agreement on Tuesday

“We put together a strong team and a strong proposal. We willcontinue to look for other opportunities to expand our natural gaspipeline system to ensure adequate supplies to growing gas marketsin South Carolina and North Carolina,” said Gibbes.

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