Dallas-based private equity firm Panda Power Funds is partnering with Sunbury Generation to develop, finance, build and operate a new one-gigawatt (GW) natural gas-fuelled power plant that will replace a retired coal-fired plant near Pennsylvania’s Shamokin Dam.
Like Panda Power’s two other power plants in the state – Patriot and Liberty, which are currently under construction – Hummel Station will also have access to Marcellus Shale, thought to be the second largest gas field in the world.
According to a joint statement, the new facility will access Marcellus Shale gas through the Marc I, Regency and Transcontinental regional gas pipelines through a new 35-mile lateral pipeline, resulting in a “significant operating cost advantage” for Hummel Station.
It was unclear whether Panda Power would be financing this transaction through Panda Power Fund II, its second vehicle which had a reported target of $800 million. A firm spokesperson declined to comment other than to say that the fund had reached final close.
According to documents filed with the Securities and Exchange Commission last October, Panda Power had, until then, raised $612.1 million for its second fund.
Once the project is completed, which is expected in the second half of 2017, Hummel Station will supply major power markets, including Philadelphia and New York City, and will have the capacity to power more than 1 million homes.
According to the two companies, Hummel Station will also provide environmental benefits by using the latest emissions-control technology that will reduce key air emissions by about 97 percent, while at the same time producing 260 percent more power than the retired coal-fired plant.
The new facility will be located at the site of the retired plant, occupying 18 acres of the Keystone Opportunity Expansion Zone. As an anchor tenant, Hummel Station will also support additional investment at the site, according to the statement.
Sunbury Generation LP, as well as its general partner Corona Power, were formed in 2006 to acquire the coal-fired power plant assets at the Sunbury Plant. Sunbury Generation’s partners include AMCI, JAZ Ventures LP and Dalk Land LP.
Founded in 2010, Panda Power develops, acquires, constructs, finances and operates large-scale, natural gas-fuelled power generation facilities. In addition to Patriot and Liberty, both 829-megawatt (MW) projects located in Pennsylvania, Panda Power has power plants either in development or operation with a combined capacity of 4,700MW in Texas, Virginia and Maryland.