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Bechtel, AMP-Ohio Partner on Electricity Generation Facility

January 9, 2009

COLUMBUS, OHIO, January 9, 2009— A multi-billion dollar investment in southeast Ohio that will bring significant economic development while helping to stabilize electric power prices took an important step toward reality today with the announcement that American Municipal Power-Ohio, Inc. (AMP-Ohio) and Bechtel Power Corporation (Bechtel) are partnering to construct a major electric generation facility in Meigs County in southern Ohio.

AMP-Ohio President/CEO Marc Gerken said his organization signed the contract on January 8, naming Bechtel the engineer-procure-construct (EPC) contractor for the $3.25 billion American Municipal Power Generating Station (AMPGS) and granting the engineering firm a limited-notice-to-proceed on the project.

The AMPGS project is an approximately 1,000 MW coal-fired generating plant, transmission line and associated facilities under development adjacent to the Ohio River in southern Meigs County. The facility will utilize the latest in proven, state-of-the-art emission control equipment, which will make the facility the cleanest in the region and one of the cleanest facilities of its type in the nation.  AMPGS will supply power to 81 municipal electric systems in Ohio, Michigan, Virginia and West Virginia.

With corporate headquarters in San Francisco and offices throughout the world, Bechtel is a global leader in engineering, construction and project management. “We are proud to have been selected by AMP-Ohio,” said Lee Lushbaugh, president of Bechtel Fossil Power.  “This is an exciting project that will benefit both the local and state economy and AMP-Ohio’s customers.” As the EPC contractor, Bechtel will manage the primary aspects of the design and construction of the AMPGS project. The contract was awarded following an RFP process and several months of negotiations. Those negotiations yielded a contract that provides incentives to Bechtel to lower AMPGS costs and provide cost escalation protection, Gerken said.

The project represents a significant economic development boost in a region of the country hit particularly hard by the current recession. Gerken estimated 1,600 construction workers will be involved during the estimated 4 1/2 year construction time frame. Once on-line, he said, the facility will employ 165 full-time operators. Conservative estimates predict the $3.25 billion facility will contribute more than $20 million to the local economy on an annual basis.

AMP-Ohio announced Meigs County as the preferred site for the facility in October 2005. The project remains contingent upon receipt of final permits and successful negotiations of state and local incentives.

“AMP-Ohio is understandably proud of the AMPGS project,” Gerken said. “This project is part of a strategic generation asset development effort in response to changes to the wholesale electric market – a market that has become extremely volatile and increasingly dysfunctional. Our asset development effort includes a diversified mix of new generation sources including hydroelectric and other renewable resources along with fossil fuel projects. It is being designed from the ground up to maximize efficiency, reduce emissions and plan for future carbon capture. This will be a state-of-the-art facility and model for responsible use of our nation’s abundant supply of coal.”  AMP-Ohio’s studies have shown that replacing power currently generated from older, less controlled, less efficient units with power generated from AMPGS will markedly decrease the emissions “footprint” of the energy used by its participating member systems’ customers.

Gerken said the AMPGS facility will utilize Powerspan emission control technology, principally to control sulfur dioxide emissions with co-benefits for the control of mercury and particulate matter. The Powerspan process will be a component of a system of emission control technology at the facility. One of the principal reasons for choosing Powerspan technology, Gerken explained, is the promise it shows for efficiently capturing carbon emissions from the facility – technology that doesn’t currently exist for large-scale applications. He said in laboratory tests conducted by the New Hampshire-based company and the U.S. Department of Energy, Powerspan was able to capture 90 percent of carbon emissions. A commercial pilot of the Powerspan carbon capture system is currently underway at the R.E. Burger plant in eastern Ohio. In addition to participating in the commercial-scale carbon capture pilot, AMP-Ohio is a member of the Midwest Regional Carbon Sequestration Partnership investigating sequestration technologies.

“We’ve done our homework in terms of carbon and have and will continue to align our organization with solid partners,” Gerken said. “We know that this is an important issue for the future of coal-fired generation, and we believe Powerspan’s technology will get us there faster and more cost effectively than any other process. When the use of Powerspan technology was being investigated as an option for future carbon capture, I was asked if I was comfortable being an early adopter of a new technology.  My response was that I would rather be among the first to install a new state-of-the-art technology than the last to install an outdated technology.”

The AMPGS project has received a final air permit-to-install from the Ohio EPA along with the final National Pollutant Discharge Elimination System (NPDES) permit, also issued by the Ohio EPA. Both of those permits have been appealed by a consortium of activist groups.  However, AMP-Ohio may legally continue to develop and to construct the project as the appeals proceed. The Ohio Power Siting Board has issued Certificates of Environmental Compatibility and Public Need for both the generation facility and the associated transmission line. Gerken said other critical path permits remain pending and are progressing along anticipated schedules.

In October 2008, a participants committee was formed comprised of representatives from the 81 participating communities from Ohio, Michigan, Virginia and West Virginia. The 18-member committee will be responsible for decisions regarding financing, construction and operation of the facility. The committee is chaired by Ivan Henderson, commissioner of Cleveland (Ohio) Public Power and Joe King, assistant city manager for utilities for the City of Danville (Virginia) who serves as vice chair.

“Our member communities are strongly behind this project because they have demanded and received due diligence and full disclosure,” Gerken continued. “This project represents a long-term source of energy, at below market rates, reducing over-exposure to the volatile market and stabilizing power costs. We are well-positioned and our timing allows us to leverage decreasing commodity prices in other markets while assessing the financial markets. The project itself is a major economic development opportunity and the construction and operation of the facility will bring substantial economic development to the southern Ohio region. Bechtel, Powerspan, The Andersons (who will partner in marketing the fertilizer product created by the Powerspan technology), and the project owner’s engineer, R.W. Beck are all U.S. headquartered companies, and very respected in their fields of discipline. The more than six years of work that have gone into this project to date have yielded a financially and environmentally responsible project that is beneficial to all involved,” Gerken concluded.

About AMP-Ohio
AMP-Ohio is the Columbus, Ohio-based nonprofit wholesale power supplier and services provider for 126 member municipal electric systems in Ohio, Pennsylvania, Michigan, Virginia, West Virginia and Kentucky.  The organization provides a diverse mix in its wholesale generation resources, which in addition to fossil fuel, includes wind, hydroelectric, landfill gas and distributed generation. For more information abut AMP-Ohio visit www.amp-ohio.org.

About Bechtel
Bechtel is one of the world's premier engineering, construction, and project management companies. Since its founding in 1898, Bechtel has worked on more than 22,000 projects in 140 countries. Today, our 42,500 employees are teamed with customers, partners, and suppliers on hundreds of projects in nearly 50 countries. For more information about Bechtel visit www.bechtel.com.

 

For more information:

AMP-Ohio contact

Kent Carson
Sr. Director of Communications
AMP-Ohio
614/337-6222
614/578-5389 (cell)
www.amp-ohio.org

Bechtel contact

Francis Canavan
Media Relations Manager
1-301-228-8950
fcanavan@bechtel.com