Financing Secured for New Gas Plant with GE HA Turbines

Financing has been secured for a new combined cycle natural gas-fired power plant in Illinois, a project expected to begin supplying electricity to the Chicago area in 2023.

Competitive Power Ventures (CPV), in partnership with GE Energy Financial Services, Osaka Gas USA, Axium Infrastructure, and Harrison Street, on August 24 said it has reached financial closing on the CPV Three Rivers Energy Center in Grundy County, southwest of Chicago. CPV said the project represents more than $1.3 billion in private investment.

CPV Three Rivers is planned as a 1,250-MW generation facility. It will use GE’s latest high-efficiency HA turbine technology, which has been proven to provide efficiency of greater than 64%. The Three Rivers plant will sell its power into the PJM market to serve Northern Illinois.

PJM lists 33 gas-fired power projects either under construction, or under construction and partly in-service, in the New Services Queue on its website. CPV has built three gas-fired power generation facilities in PJM, the most recent of which is the 1,050-MW CPV Fairview Energy Center in Pennsylvania, which came online in December 2019.

“The $1.3 billion investment in the CPV Three Rivers Energy Center is a testament to the economic viability of new, natural gas-fired power generation in PJM. New, natural gas-fired generation like CPV Three Rivers complements renewable generation, providing a reliable, cost-effective and environmentally responsible electric grid,” Jennifer Villarreal, CPV Corporate Communications Director, told POWER. “As the recent blackouts in California have shown us, states need reliable electricity that balances renewables with fast-ramping, dependable natural-gas-fired generation.”

Kiewit Will Lead Construction

CPV on Monday said construction, led by Kiewit Power Constructors Co., will commence soon, with commercial operation of the plant expected to begin in 2023. CPV Three Rivers is CPV’s largest project to date. The company, headquartered in Silver Spring, Maryland, has five operating gas-fired power plants, in addition to a wind farm in Oklahoma. The company has ownership interest in 4.2 GW of clean generation across the U.S., and CPV’s Asset Management division currently manages more than 9.3 GW of fossil and renewable generating facilities in nine states for 12 different owner groups.

Financing for the Three Rivers project (Figure 1) “includes $875 million of senior credit facilities arranged on a true club basis, with broad-based support from a diverse group of 14 international financial institutions and investment from the equity partners,” CPV said in a news release.

1. This is a rendering of the Three Rivers Energy Center that will be built in Grundy County, Illinois. Courtesy: Competitive Power Ventures

“CPV is pleased to announce the financing of CPV Three Rivers, continuing our string of success in bringing another state-of-the-art electric generating project that will modernize the nation’s electric grid by generating safe, reliable, cost effective and environmentally responsible electric power. This project is located in Illinois and will serve the PJM market for years to come,” said CPV CEO Gary Lambert. “While the pandemic posed challenges throughout this process, we are thankful to our partners, lenders and host community for their perseverance and confidence in the success of this project.”

“[Illinois] Gov. Pritzker’s newly announced energy plan supports a market-based approach by putting a price on carbon and rejects the ill-advised path through a Fixed Resource Requirement (FRR) that inordinately favors existing, economically challenged generation,” Tom Rumsey, CPV Senior Vice President of External and Regulatory Affairs, told POWER. “This appropriately puts the focus on reducing carbon emissions by incentivizing innovation, competition and private capital investments like Three Rivers and potential future investments in renewable projects within Illinois.”

“Achieving financial close for CPV Three Rivers during a global pandemic and with commitments from 14 international lenders is a testament to CPV’s successful track record developing, financing, constructing, and operating safe, reliable, cost-effective and environmentally responsible power generation facilities,” said Paul Buckovich, CPV’s chief financial officer. “We’re grateful for the trust our lenders have placed in us to deliver.”

“Once again, we’re proud to partner with CPV and GE Energy Financial Services on a cost-effective and environmentally-responsible power project,” said Tetsushi Ikuta, president of Osaka Gas USA. “The CPV Three Rivers Energy Center will facilitate the electrification of energy end uses with a smaller carbon footprint while providing grid reliability.”

The water needed to help cool the new plant will be supplied by deep bedrock on-site wells, which should lessen the facility’s water use. CPV said the plant’s air-cooled design will reduce water use by 90%, compared to a wet-cooled facility.

“Axium is thrilled to participate in the Three Rivers project and, when completed in 2023, to add this valuable asset in Illinois to its well diversified portfolio of infrastructure assets across North America,” said Thierry Vandal, president of Axium Infrastructure US Inc. Axium’s U.S. office is in New York City. The company, an independent portfolio management firm, also has offices in Montreal and Toronto in Canada.

Susan Flanagan, president and CEO of GE Energy Financial Services, said, “Achieving financial close on the 1,250-MW CPV Three Rivers Energy Center demonstrates GE’s ability to partner with our customers on large, complex and capital-intensive infrastructure projects. CPV is an experienced and valued co-development partner to GE in the U.S. In the past decade, CPV and GE have closed six projects totaling over 4,000-MW utilizing GE technology and raised over $4 billion of capital.”

Plant Powered by GE Turbines

The plant will feature two combustion turbines, two heat recovery systems, and two steam turbines. It is being designed with operational flexibility to allow quick response to changes in power demand, and to help balance increased deployment of renewable power generation.

“GE is honored to continue its relationship with Competitive Power Ventures by supplying advanced gas technology for CPV’s third HA-powered facility,” said Scott Strazik, president and CEO of GE’s Gas Power business. “Our relationship with CPV is built on proven results, and we are proud to be able to provide state-of-the-art technology, services and strategic financing to help develop complex projects like Three Rivers, which will provide reliable, affordable, and sustainable electricity to CPV’s customers.”

The project is expected to bring millions of dollars in private infrastructure investment to Grundy County. CPV on Monday said it expects more than 500 union workers will be onsite at peak construction. The energy center will have a staff of 25 full-time workers once operational, with about 75 additional staff providing ongoing services to the plant.

Local officials expressed support for the project, particularly for its job creation and economic benefits for the region.

“CPV Three Rivers will provide $1 billion in economic development and hundreds of good-paying, union construction jobs to Illinois over the next two years at a time when more than 1 million Illinoisans are unemployed,” said Rep. Larry Walsh Jr. (D-Joliet). “Energy has always been the backbone of Grundy County, and I support the expansion of all resource types to ensure grid reliability, bring new tax revenue streams to the state of Illinois and spur job creation that puts Americans back to work.”

Redevelopment Agreement Will Support Local Economy

CPV said the plant has executed a long-term redevelopment agreement that will help support Grundy County’s tax base, services, and economic development, including local schools.

“As a staunch supporter of the CPV Three Rivers project during its development, I could not be happier to see CPV and their partners reach this critical milestone,” said state Sen. Sue Rezin (R-Peru). “Not only are they enhancing the region’s energy corridor by constructing a state-of-the-art generation facility in Grundy County, but also becoming an integral part of our community, committed to supporting our first responders and local schools.”

Christopher Merrill, Harrison Street’s co-founder, chairman, and CEO, said, “CPV Three Rivers Energy Center is a cutting-edge energy facility that will provide reliable, highly efficient power to our hometown of Chicago. This investment is reflective of Harrison Street’s commitment to supporting mission-critical infrastructure assets and our ability to execute complex transactions amid uncertain environments. We are thrilled to be partnering with CPV, GE Energy Financial Services, Osaka Gas and Axium on this long-term project and bringing our infrastructure investing expertise to the Northern Illinois community.”

Darrell Proctor is associate editor for POWER (@DarrellProctor1, @POWERmagazine).

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