A roughly 350-megawatt natural gas plant formally opened northwest of Goldsmith on Wednesday, heralded by local governmental officials as a boon to the local tax base, particularly the Ector County Independent School District.
The so-called Ector County Energy Center sits on about 32 acres that were vacant ranchland a year ago near the Andrews County line. It is designed to provide peaking energy and respond quickly when the state grid operator requests additional power supply.
The plant uses two GE 7FA simple-cycle combustion turbines fueled by Permian Basin natural gas, piped in on a seven-mile line. Plant manager Chris Moore said the facility uses relatively small amounts of water — 150 gallons per minute during peak times — and it uses all of the natural gas it takes in, meaning no flares.
Commercial operation began on Sept. 28, before the final, mostly cosmetic, touches were put on the facility, Moore said. Generation from the plant has already hit about 294 megawatts.
The facility connects to Oncor Electric’s Holt Switching Station, in sight of the facility about a quarter of a mile away. But the buyer of the plant’s power is the grid operator, the Electric Reliability Council of Texas.
The plant employs seven full-time workers. More than 200 workers built the plant, constructed by Abilene-based Lauren Engineers and Constructors.
“This is a wonderful day for Ector County economic development, a great example of expanding the tax base,” said recently appointed Ector County Judge Ron Eckert, during a ribbon-cutting ceremony Wednesday.
Invenergy senior engineer Joseph Brisebois called Ector County “the model county when it comes to supporting power generation development” and he thanked local officials, especially former Precinct 1 Commissioner Freddie Gardner, who he said was instrumental to the project. Gardner died in September 2014.
Ector County Commissioners Court in March authorized a tax abatement for the $120 million plant. The deal allowed a full tax abatement for the first seven years Invenergy is in Ector County. In the eighth year, the abatement decreases to 75 percent, then to 50 percent in the ninth year and 25 percent in the tenth year.
Other taxing districts also OK’d tax abatements for the plant, which Invenergy representatives described as necessary in a highly competitive power generation market.
ECISD cannot offer abatements, and Brisebois said the windfall from property taxes on the plant in 2016 should net about $1.27 million for the district.
“That’s a big chunk of change for us,” said Nelson Minyard, president of the Ector County Board of Trustees, at the Wednesday event.
The plant was not online Wednesday. That will be the case for about 75 percent of a given year, even though employees will staff it and keep it ready, said Graham Baldwin, a director of asset management of operations for Invenergy.
But the plant has about a 30 minute start-up time, and Invenergy’s plan is to bring it online at times when demand drives electricity prices high enough for the company to profit. That rate is about $20 per megawatt hour, Baldwin said.
On Wednesday, the local rate was about $15, according to ERCOT.
The downturn in oil and gas activity has curbed demand for midstream facilities, such as natural gas processing plants. But downstream facilities such as the Ector County Energy Center benefit from abundant and cheap natural gas, about $2.62 per MMbtu (million British Thermal Units).
“We are looking at the spread between natural gas and power, so when we saw we can burn fuel and make power for less than the market price, we can make some profit here, then we turn the plant on,” Baldwin said. “If not, then not.”
The busiest times for the plant will be in winter and summer, when electricity demand spikes.
“This power plant will be here for many years to come, and we hope to be a good neighbor,” Brisebois said.
This article was written by Corey Paul from Odessa American, Texas and was legally licensed through the NewsCred publisher network.