Construction will start by June on an innovative $470 million electric power generation plant near Tennessee Colony in rural northwest Anderson County, a company official said.
Despite county commissioners having granted a partial tax abatement, the new plant “in the first 10 years will pay a little over $28 million of taxes to the schools and county,” Jack Farley estimated.
Farley is president/CEO of Apex Compressed Air Energy Storage LLC, the Houston-based company planning to build the plant.
The plant will use new technology to use compressed air in an underground salt dome to produce electricity for the wholesale grid.
Apex has obtained all of the federal and state permits required for construction and is completing project financing, Farley said.
“We’ve gotten great support from everybody, from the county judge and county commissioners to the local community. It’s a very supportive local community. Tennessee Colony and the county leadership and Cayuga school district have all been very supportive of the project,” Farley said.
Anderson County Judge Robert Johnston predicted, “It’s going to be a wonderful thing for the county. We’re excited to have them for a corporate neighbor and really look forward to working with them, and hopefully it will lead to bigger and better things.”
The plant will be “the cleanest running electric plant in the nation” other than wind power or solar, Johnston said.
Anderson County gave the company an eight-year abatement for county taxes, starting at 90 percent and gradually declining each year thereafter to zero.
“Even with the abatement, we will be paying a lot of taxes, which will especially help the county, Farley said.
Johnston agreed, saying, “It will eventually lead to a lot of money in taxes for the county.”
It will help the Cayuga school district, in which the plant will be partially located, but the district will not be able to keep all its extra tax revenue from the plant because of Texas’ Robin Hood system of funding public education, Farley said.
The new plant will be called the Apex Bethel Energy Center because it will be at the site of the Bethel Salt Dome and the intersection of Farm-to-Market Road 2706 and Anderson County Road 2504.
Construction will take three years, and the plant is expected to start full commercial operations in July 2017, Farley said.
During construction, up to 200 construction workers will be on the premises, Farley said. Once the plant begins operating, it will employ 22 to 25 operators at an average pay scale of between $20 and $50 an hour, Farley said.
Johnston called them “high-paying jobs that will be of benefit to Anderson County and Palestine.”
Apex has lined up contractors for construction, equipment, land and rights of way as well as obtained numerous permits necessary for the project, Farley said.
“All we are doing now is completing our debt financing with the banks. We are soliciting debt funding. We have all the equity funding committed and we are working through that process and hopefully it will be completed by the end of May so we can begin construction,” Farley said.
Farley revealed about two years ago that the company had picked Anderson County for the site of its new plant and was seeking several state and federal permits.
According to a report filed recently with the Public Utility Commission of Texas, Apex received an air permit for the plant from the Texas Commission on Environmental Quality in September 2012 and a permit for a cooling tower (discharge to Trinity River) in September 2013.
The Texas Railroad Commission issued Apex a cavern well permit in December 2013 and the Corps of Engineers issued a wetlands permit in November 2013.
In March, Apex received the last permit needed before construction could start, which is a greenhouse gas permit from the U.S. Environmental Protection Agency.
“We will produce electricity for the wholesale market to put onto Texas’ transmission grid; we will be selling this electricity to utilities or power utilities or large retail providers,” Farley said.
In deciding where to locate the plant, Apex searched and screened salt dome formations across the state and found Anderson County “the most attractive,” Farley said.
Apex will build a cavern in the salt dome that will be about 3,700 feet below the Earth’s surface, about 1,000 feet tall and about 250 feet wide.
Use of an air cavern for power generation is uncommon, Farley said, but it will allow the plant to provide stability regulation services when the Texas grid needs more power or less power very quickly.
“That’s what’s unique about this technology; it’s a very fast-responding power generation source,” Farley said. “The storage cavern lets us have high pressure air available at a moment’s notice to fire the turbines and that’s one of the reasons it’s such a faster responding source.”
The availability of pipelines for natural gas supply and also an Oncor power transmission line through the site contribute to the attractiveness of the location, he said.
The storage cavern will allow Apex to have high-pressure air available to fire combustion turbines in the process of generating electricity, Farley said. Apex will use electric motor-driven large compressors to inject air into the cavern.
An electric generator will be hooked to a series of expansion turbines that fire natural gas at high pressure to make the turbines spin and put electricity on the wholesale grid. Standard gas turbines have to do their own compression while they are generating, which makes them a lot slower to respond to changes in requested output, Farley said.
High voltage wires connecting to the Oncor system will be used to deliver the energy to the grid system.