Financing finalized for Nelson power project

NELSON – Financing for construction of the long-planned Nelson natural gas-fired power plant has been finalized.

A lending group led by General Electric will provide loans for Chicago-based Invenergy LLC to get the 584-megawatt plant operational. One megawatt of power provides electricity for about 1,000 homes.

GE is involved in the project on two levels. In addition to heading up the financing arrangement, the company will provide much of the equipment for the plant under a long-term contract for maintenance and engineering services. Included will be two gas turbines and two steam turbines equipped with software designed to improve efficiency and cut operational costs.

The project site, an abandoned power plant at 1311 Nelson Road, south of Rock Island Road, has seen two owners begin work since 2001. NRG Energy bought the 165-acre lot to build a gas-fired electrical power plant. NRG, however, filed for bankruptcy protection in 2003 before completing the project.

Further complicating matters was that the construction contractor for NRG was NEPCO, a subsidiary of Enron. Although NEPCO didn’t file for bankruptcy when its parent company collapsed in late 2001, Enron had taken much of the subsidiary’s cash before its filing, leaving NEPCO’s assets frozen by the courts.

Invenergy bought the property in 2006, with plans to use ethanol and natural gas to generate electrical power. At that time, the company said the plant would create 70 jobs. When plans for the ethanol portion of the project were scrapped, that number was reduced to an estimated 20 to 25 jobs.

Lee County Economic Development Director John Thompson said the financing announcement is consistent with the overall timeline of the project.

“They wanted financing in place before the end of 2013, construction completed in 2014, and production to begin in early 2015,” he said.

Thompson said that by the time the Nelson Energy Center is fully assessed, possibly by the end of 2016, it could become the biggest taxpayer in Lee County. Taxes wouldn’t be paid until 2017, in that scenario. The Lee Energy Facility, operated by Duke Energy in Nachusa, is now the county’s largest taxpayer.

Although Thompson said it’s too early to estimate numbers for the Nelson plant, the tax value on the Nachusa operation is $31 million, which has the company paying about $300,000 a year to the county.

Given that the Nelson plant straddles Whiteside County, some Rock Falls entities also would be beneficiaries.

“About 85 percent of that would go to school districts,” Thompson said. “It’s the same group of taxing districts as for the old National Manufacturing building.”

Those districts would be Rock Falls High School, East Coloma-Nelson Elementary, Sauk Valley Community College, County of Lee, Nelson Township, Nelson Highway Department, Rock Falls Fire Protection, and multiple Nelson and Harmon township entities.

Thompson said he is impressed by the way Invenergy has handled a difficult situation.

“Ten years ago, they said they’d buy this property and hang on to it until it makes economic sense,” Thompson said. “They were willing to pick up the pieces from the bankruptcy situation, put the financing in place, and stick to their promise.”

The plant will sell power into the PJM wholesale market. PJM operates the power grid serving Illinois and 12 other states.