West Deptford Power Plant Left Out of Incentive Program

West Deptford Energy, LLC’s proposed natural gas power plant was passed over for a long-term incentive program, in favor of a trio of power plants in central and northern New Jersey, by the state Board of Public Utilities (BPU) Tuesday.

The BPU followed the advice of consultants Levitan and Associates, which recommended the three other plants in a pair of reports over the last two weeks, and green-lighted plants in Old Bridge, Newark and Woodbridge.

“The LCAPP competitive bid process will result in improved reliability for New Jersey ratepayers while providing rate relief for the next 15 years with a present value of $1.8 billion,” said Lee A. Solomon, President of the Board of Public Utilities in a release.

West Deptford Energy’s proposal, which officials with the company said was a key part of getting the project off the ground, was disqualified by Levitan earlier, during the selection process, over disagreements over the Standard Offer Capacity Agreement, a contract between the power generators and utility companies.

Tom Hoatson, director of development and regulatory affairs for LS Power, the parent company of West Deptford Energy, said in a letter to the BPU that LS Power favored an industry-standard contract, and that the contract put together by Levitan “will not be financeable, creating an insurmountable barrier to the investment of capital in new generation.”

Both LS Power and the township made a last-ditch appeal and sent letters to the BPU at the end of last week, pleading the project’s case directly to the board.

In LS Power’s appeal, Hoatson said the West Deptford Energy project is “the lowest risk and greatest benefit to ratepayers,” adding that the project was the lowest bid under the Long-Term Capacity Agreement Pilot Program and could save ratepayers $400 million versus the recommended plants.

Steven Weinstein, special counsel to the township, argued that Levitan ignored the potential benefits to West Deptford and the surrounding community in rejecting the proposal over the contract dispute.

“The location of the property is particularly well-suited to the project and the financial benefits to the residents are of immense importance,” Weinstein said, noting that there is potentially $107 million in Payment in Lieu of Taxes money on the line, which would be paid to West Deptford over a 30-year period under the West Deptford Energy project.

The three projects approved by the BPU are: