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Kalama Natural Gas Power Plant Plans in Jeopardy by Barbara LaBoe The Daily News, May 20, 2013

Plans for a $400 million natural gas power plant in Kalama are in jeopardy as one of the main partners dropped out of the project, officials said Monday. The uncertainty also has halted plans for a controversial natural gas pipeline nearby.

Energy Northwest was working with Canada-based Veresen Inc., to build the 346-megawatt plant on leased land at the Port of Kalama. Last month, though, Veresen announced it was pulling out of the project due to "market conditions," Energy Northwest spokesman Mike Paoli said Monday. Veresen subsidiary Fort Chicago had an option to take over the project when construction started.

The Kalama Energy Center was expected to employ 15 to 19 full-time workers once completed. Company officials said they'd employ an average of 90 construction workers during the two-year construction, with 170 workers during some peak times. The project was listed as a bright spot in Cowlitz County Commissioner George Raiter's 2012 "State of the County" address.

Now, however, all plans are on hold while Energy Northwest reviews its options, including possibly finding another company with which to partner, Paoli said. The project isn't dead, but officials are analyzing all risks and opportunities before deciding their next move, Paoli said. He noted that natural gas prices are volatile, possibly undercutting the viability of the project.

"The future (of the site) is being reassessed."

Energy Northwest has a 50-year lease on the Kalama property, though officials can opt out of that lease in 2015, Paoli said.

This the same site where Energy Northwest once hoped to build a coal/petcoke gasification plant. That project ran afoul of a 2007 state law intended to reduce carbon dioxide emissions that could contribute to global climate change. It was dropped in 2009.

Energy Northwest is a public power group made up of 23 public utility districts, including Cowlitz PUD.

Neighbors along the route of the proposed 3-mile pipeline cheered news that Williams Northwest Pipelines had withdrawn its application to build the line, which would have supplied natural gas to the plant. They objected to the pipeline route due to safety concerns.

"It's great news," said Bill Spencer, whose Hale Barber Road was near the proposed pipeline route. "I'm delighted for myself and my neighbors because now our area isn't jeopardized. ... It's just good to know we're not going to have that disruption up here."

"It was always clear that if the power plant didn't move forward, the pipeline wouldn't be built," said Williams Northwest spokeswoman Michele Swaner. The Utah-based company withdrew its pipeline permit application last month and land owners of the proposed site will get a formal letter announcing the end of the project, she said.