PCL Industrial Construction and a Black & Veatch subsidiary have been awarded a contract from Louisville Gas & Electric and Kentucky Utilities to design and build a new natural gas-fueled power plant. The new plant, named Cane Run Unit 7, will replace older, coal-fired units that will be retired by 2016.
The new Cane Run facility will be fueled by cleaner burning natural gas and provide up to 660 megawatts of capacity, the equivalent to powering approximately 660,000 homes.
The joint-venture partnership, collectively known as Bluegrass Power Constructors, will provide full engineering, procurement and construction services for the new Cane Run power plant. Overland Contracting Inc. (OCI), a wholly owned subsidiary of Black & Veatch, will provide engineering, electrical construction and startup services. PCL will provide construction services.
The Cane Run Natural Gas Generating Facility will incorporate combined cycle technology. The facility will feature the latest Siemens advanced technology gas turbines, the SGT6-5000Fee.
Earlier this year, the Kentucky Public Service Commission approved plans for Louisville Gas and Electric Company and Kentucky Utilities Company to build and buy new natural gas generation to meet the energy needs of their customers.
As a result of stricter federal Environmental Protection Agency regulations, several of the utilities’ older, coal-fired units – representing more than 13 percent of the utilities’ coal fleet – must be retired by 2016. Subject to receipt of other permits, LG&E and KU plan to build the 640-megawatt, natural gas combined-cycle (NGCC), generating unit at the existing Cane Run site in southwestern Louisville.
The ruling also moves the utilities a step closer to the purchase of three additional simple-cycle natural gas combustion turbines from Bluegrass Generation located in LaGrange. The purchase of the Bluegrass units, which will provide up to 495 megawatts of peak generation supply.
“With this regulatory approval, we can begin focusing on this significant investment in our system. We worked diligently to develop a least-cost solution to meet the federal regulatory mandates and we’re pleased that the KPSC has approved the plan,” said Lonnie Bellar, vice president of State Regulation and Rates for LG&E and KU.
The NGCC is expected to cost approximately $583 million and the Bluegrass plant is expected to cost approximately $110 million. Recovery of the additional costs is not part of today’s ruling, but will be included in future rate proceedings.
Cane Run and Green River coal units will need to remain operational until the replacement generation and associated transmission projects are completed. Construction of the NGCC is expected to begin this year and be completed in 2015. At the peak of the construction phase, approximately 250 jobs are expected to be created.