Developer aims to double size of natural gas plant near New Carlisle

NEW CARLISLE — A developer is seeking approval needed to double the size of a natural gas-fired electricity plant that is under construction.

The $500 million, 700-megawatt plant is being built near the town of New Carlisle at a 165-acre site on the northwest corner of Walnut and Edison roads. The plant — slated to be operational by June 2018 — would be expanded to become a 1,400-megawatt complex if the second phase of the project materializes. That phase calls for an additional $500 million investment.

But several hurdles need to be cleared, including the approval of another tax abatement by the St. Joseph County Council, for the next phase of the St. Joseph Energy Center project to materialize. The project is a joint venture funded by the Toyota Group and Ares Private Equity Group. It is being developed by White Plains, N.Y.-based Development Partners.

Willard Ladd, principal for Development Partners, said the group needs approval for the second phase from Midcontinent Independent System Operator, which oversees the electricity transmission system in the Midwest. Ladd said he hopes to have that approval by the end of the year.

Development Partners would then work with municipal officials to seek approval of the site plan, which could take about six months, and it would also seek a tax abatement from the county. The project’s first phase was aided by a 15-year, $60 million tax abatement.

“The tax abatement is terribly important in order to see these facilities move forward, and I think the County Council understands that,” Ladd said Wednesday, adding that he hopes construction for the second phase will start by mid-to-late 2017.

A pair of turbines will be built for the current project, and two more would be added to the multi-building complex if the second phase materializes. Turbines will generate electricity with steam created from compressed air and burned natural gas. That gas will be delivered to the plant from an existing underground pipeline that is part of a network spanning North America. Electricity will be sold through the electrical grid using an existing nearby American Electric Power substation. Multiple wells will supply water to the plant, which will discharge the majority of its wastewater into a nearby ditch. Other wastewater will go to South Bend’s wastewater treatment plant.

Ladd said the plant’s Midwest location is ideal because it will have the ability to buy natural gas at the lowest wholesale prices from different regions of North America: the West, Northeast, Canada and Gulf of Mexico. “There are ample supplies and prices appear to be low for the foreseeable future,” Ladd said.

The project will have economic perks. There are now nearly 200 temporary construction workers at the site and that’s expected to rise to 500 by next summer. When the plant becomes operational, it will be staffed by 20 full-time employees with an average annual salary of $95,000. The project calls for a $13 million well-water treatment plant that will be turned over by the St. Joseph Energy Center to the town of New Carlisle when it’s operational. Along with treating water used by the plant, it will have excess capacity for other industrial users.

County officials have estimated the plant will generate $43 million in new property taxes over its 30-year lifespan. That funding could be invested in area infrastructure improvements to spur future development.

If the project’s second phase is completed, it would create an additional 20 full-time jobs and more property tax revenue, said Lou Pierce, a spokesman for the St. Joseph Energy Center. “It’s definitely something we’d like to talk to New Carlisle and the county about,” he said.

Workers broke ground on the plant in the fall of 2015. The general contractor for the project is Kiewit Power Constructors of Lenexa, Kan. Power Plant Management Services of Houston is overseeing the construction of the facility and will operate it.

Bill Schalliol, the county’s economic development director, did not return a call Wednesday seeking comment.