The developer of an electricity generation plant planned for Charles County backed out of the agreement yesterday, dealing a severe blow to the county's leading economic development project and the largest private investment in its history.
In a letter sent via overnight mail to the Maryland Public Service Commission, Houston-based Reliant Energy officials said poor conditions in the wholesale electricity market made the $1.2 billion Kelson Ridge Plant in Waldorf impractical, said company spokesman Richard Wheatley.
The company will relinquish the building permit granted by the commission in September 2001, Wheatley said.
"We elected to go ahead and essentially cancel this," he said in an interview, noting that market conditions had prompted the company to either scuttle or delay at least six other projects across the country in the past year.
County officials said they didn't learn of the energy company's decision until receiving a call from a Washington Post reporter yesterday afternoon, but they were not shocked by the news. Little has gone as planned since the project was conceived in 1999 as a way to fund the county's five-year, $106 million road construction program.
Reliant initially suspended work on the 1,650-megawatt plant after purchasing the project from its original developer last year. A prospective buyer fell through this fall, company officials said, a result of the lingering effects of the collapse of Enron Corp. and the downturn in the energy market.
The plant, projected for a 77-acre site in Waldorf, would burn natural gas to create electricity. The power would be sold to electricity wholesalers, who then would sell it to utilities with customers in several states.
County commissioners initially were convinced that tax revenue from the project would allow them to adopt their five-year road plan without raising taxes.
Reliant is giving up the so-called certificate of public convenience and necessity it acquired after a series of public hearings and evaluations from the state Public Service Commission. This permit was the first of several regulatory steps required to build a generation station, a commission spokesman said.
Wheatley would not confirm whether the company definitely intends to sell the project. He said the corporation has a variety of options, but he would not elaborate.
County officials have had little contact with Reliant since negotiations with the last potential buyer ended. They had assumed the company was trying to quit the project, County Administrator Eugene T. Lauer said.
When the sale of the project fell through this fall, county leaders remained undeterred in their goal to see it through. Yesterday, that optimism remained. The Kelson Ridge revenue, officials said, made up only a small portion of the capital improvement plan, and none of the money expected from the project had been spent.
The board might have to restructure some of the road construction phases in the capital improvement plan, but the program will move forward.
"We're still hopeful that this is going to happen sometime over the next several years," Lauer said. "It's still a viable site."