Competitive Power Ventures Inc. is making its first splash in Connecticut and it’s a big one.
The company's power plant in Oxford has already won international recognition—and it hasn’t even been built yet. If construction is completed on schedule, it will be the largest power plant to go online in Connecticut in more than 15 years.
Connecticut’s largest power producer, the 2,162.9-megawatt Millstone Nuclear Power Station in Waterford, is hoping for state legislation that would enable it to sell directly into markets but is meeting opposition from some non-nuclear electricity producers. Other nuclear plants have closed around the country because of financial issues in recent years, and Millstone’s representatives have said their plant is not immune to economic pressures.
Millstone produces 46 percent of Connecticut’s electricity, according to the U.S. Energy Information Administration.
Only two other Connecticut stations—the Lake Road Generating Station in Killingly and Middletown Power LLC in Middletown—can produce more than the planned 785-megawatt CPV Towantic Energy Center.
Like CPV Towantic, 840-megawatt Lake Road and 846-megawatt Middletown Power are natural-gas fired facilities. Lake Road, which has three units of 280 megawatts each, opened in 2002. Middletown’s facilities are much older. Natural gas has had the strongest hand as a fuel source in recent years due to its relative cheapness and pollution policies.
“Connecticut is evolving and so are its energy needs,” said Tom Rumsey, CPV’s vice president of external affairs. “CPV Towantic is a custom-designed solution to meet the region’s growing electricity needs.”
General Electric Co.’s Energy Financial Services unit and Washington, D.C.-based Ullico Inc. are the minority shareholders on the project, owning 35.3 percent and 13.7 percent, respectively. The plant will operate using GE turbines.
The CPV Towantic Energy Center was given the Americas Power Deal of the Year 2016 award by Project Financial International, a financial analysis service owned by Thomson Reuters. Representatives of Maryland-based CPV were presented with a trophy during a Feb. 1 ceremony in London, England.
CPV, which is handling the Oxford project through its New England regional office in Massachusetts, has won two previous Project Finance International awards for work outside Connecticut. The $1 billion Towantic project was honored in part because of its large scope and potential for the New England electricity market that lead to $755.3 million in financing arranged by parties overseen by New York-based Milbank Tweed Hadley & McCloy LLP, the deal's common finance counsel.
The award is “a testament to CPV’s strong relationships with the lending community and its history of creating value for its lenders,” Rumsey said.
CPV Towantic is combined-cycle facility, which means it uses both gas and steam turbines to produce up to 50 percent more electricity than a simple-cycle plant, using the same fuel. The under-construction plant has been called “one of the largest ever to become a supplier for New England’s multi-state electric grid coordinator” by Milbank. It is capable of creating enough electricity to light 785,000 homes.
Milbank expects Towantic to become a supplier to the regional grid operator, known as ISO New England, although it hasn’t secured a market for its electricity yet. The Towantic project includes $100 million in transmission line upgrades that will strengthen the grid in central Connecticut, CPV says.
“We expect our CPV Towantic Energy Center to be part of the open, competitive wholesale market,” Rumsey said. “We are not relying on any investment from Connecticut or its ratepayers.”
The wholesale market is administered by ISO New England and regulated by the Federal Energy Regulatory Commission.
CPV is contracting with about a dozen Connecticut companies plus local union labor, Rumsey said. Glastonbury-based Gemma Power Systems LLC is the project’s general contractor.
Gemma Power Systems, now in its 20th year, worked on the A.L. Pierce Repowering Project, also known as CMEEC Pierce, in Wallingford that was completed in October 2007 and the Middletown Repowering Project in Middletown, also known as Genconn Middletown, that was finished in June 2011. Gemma has been general contractor on about 80 projects.
Even though it became part of Maryland-based Argan Inc. about 10 years ago, Gemma Power still has deep roots in Connecticut thanks to its founders, CEO Bill Griffin and the late Joel Canino, who were both from Connecticut.
“Our founders realized that New England would be a great opportunity for companies that work on replacing aging power plants and things have blossomed from there,” Gemma Power spokeswoman Sandra Ahearn said.
Gemma fits well with the local team that is aiming to complete construction of Towantic in the second quarter of 2018, Rumsey said. Full notice to begin construction was granted in March 2016.
About 300 workers are currently active at the secluded 26-acre site inside the Woodruff Hill Industrial Park. The number of workers is to double by the end of the year, he said. The plant will have about 25 fulltime employees once it’s operational.
The infrastructure and location are viewed as very positive by the plant builders.
“We saw many advantages to building the CPV Towantic plant at this site, including that it is an industrial zone, adjacent to gas and transmission lines, and close to load centers,” Rumsey said. “These attributes greatly lessen any negative impacts on the surrounding communities.”
As part of the agreement with the Town of Oxford, CPV built an access road to the plant that is called East Commerce Drive. The road’s creation opened up 11 industrial lots that can be sold off for future development, Rumsey said. CPV installed water, sewer, electricity, and information technology utilities on each lot, which should speed future development, he said.
After its completion, Towantic is expected to run for more than 30 years, Rumsey said. He sees the plant’s main fuel of natural gas and backup fuel of ultra-low sulfur distillate as being harmonious with the drive for more green energy in Connecticut and neighboring states.
“We are pleased to use flexible, baseload technology, which together with wind and solar facilities will help facilitate renewable energy growth in New England,” Rumsey said.