Power plant plug pulled

Alcoa cites plan’s escalating cost

Friday, Dec. 14, 2007

Officials from Alcoa Inc., which operates a shuttered aluminum smelter in Frederick County, determined in an unreleased report that it would not be financially feasible to build the coal-fired generating station on the sprawling installation in western Charles County.

‘‘It’s looking cost-prohibitive to us based on the feasibility study,” said Earl H. Robbins Jr., Alcoa’s government affairs manager. ‘‘... We were looking to build a power plant on the Indian Head naval base, and it doesn’t look like that’s going to happen.”

The Pittsburgh-based company had eyed the undeveloped site at the southeastern corner of the base for months to construct a facility that would supply electricity to its Adamstown smelter, Eastalco Alcoa Works, which closed in December 2005 due to soaring energy costs. About 600 jobs were lost.

Charles County officials had been facilitating discussions for months between Alcoa and the Navy. The approximately $1 billion plant would have brought up to 200 permanent jobs, along with a stable energy supply and additional corporate tax revenues, to Charles County.

Officials said it could also trigger economic investment on the western side of the county and help shield the Indian Head base from future military downsizing.

The project’s abandonment disappointed local officials.

‘‘I’m disappointed that we will not have an opportunity to rectify the condition that currently exists,” said Commissioner Edith J. Patterson (D), whose district includes Indian Head. Patterson said a new plant would have replaced the current base power plant that is ‘‘still spewing pollutants into the air.”

‘‘I’m sorry that they’re not going to be able to do it,” said commissioners’ President F. Wayne Cooper (D). Cooper said he was told that construction costs for the plant ballooned by more than 70 percent since Alcoa first considered building the plant.

Cooper said he believes the site would still be ideal for another modern, clean power plant. ‘‘I think it was a great idea. ... I just think it’s very unfortunate that it didn’t work out.”

‘‘The cost of building a modern plant is much higher, and they were just not able to make the numbers work,” said Del. Murray D. Levy (D-Charles), who was involved in the discussions since it came to light.

Base officials received word of the decision Wednesday, but a spokesman for the base said they did not have a large stake in whether the project went forward.

‘‘It was never the Navy’s project. This is something that was brought to the Navy for consideration,” said Gary Wagner, public affairs officer for Naval Support Activity South Potomac, which manages the Indian Head and Dahlgren installations. ‘‘We did what we ... felt was appropriate to listen and accommodate discussion on the project, but it was really up to Alcoa to conduct their own analysis [on] what it would take for them to build a power plant on Navy property at Indian Head and if that would in fact meet their needs.”

Had the project gone forward it would have provided 350 megawatts of power to the Eastalco plant, with the balance available for market sale that could have relieved congestion on the power grid and reduced electricity rates for Southern Marylanders, supporters said.

Another proposed generating station in St. Charles — a 600-megawatt natural gas-fired power plant — could fill the void. Competitive Power Ventures of Silver Spring announced this summer that it would build the $400 million plant on a 77-acre industrial tract that was formerly slated for the abandoned Kelson Ridge power plant project.

Construction is scheduled to begin in 2009 and finish in 2011.

Meanwhile, Robbins said Alcoa will seek alternatives in its effort to reopen the Frederick County plant. ‘‘This does not end our goal to get Eastalco restarted,” he said. ‘‘It is a setback, but this does not end that process.”

Staff writer Jay Friess contributed to this report.