SOUTH BEND — The county Redevelopment Commission on Friday approved contracts related to a proposed $700 million power plant in Olive Township, near New Carlisle.
The commission agreed to hire the engineering firm Ken Herceg & Associates and Crowe Horwath, a public accounting and consulting firm, to determine the plant’s infrastructure needs and the county's ability to pay for them.
The commission will pay Herceg & Associates $177,510 for its services and Crowe Horwath no more than $3,000, according to the contracts.
"Most of this is just plumbing to serve the new facility," Project Future Executive Director Patrick McMahon, who is working with New York-based Development Partners on the proposed plant, told the commission.
According to McMahon, new sewer and water lines will need to be installed to serve the plant, which will be located at the northwest corner of Walnut and Edison roads.
In addition, the county will need to construct a new water treatment plant or expand the existing plant, which serves I/N Tek and I/N Kote and surrounding businesses, to meet the plant's treatment needs, he said.
Herceg & Associates, based in South Bend, previously performed work at the site related to a proposal, since abandoned, to build a similar power plant there about 10 years ago.
At the time, the firm estimated the cost to provide the infrastructure needed to support the plant at between $16 million and $17 million, McMahon said.
That amount is likely to increase this time around, he said, considering inflation and the fact that, compared to the previous developer, Allegheny Energy Supply, Development Partners intends to generate twice as much electricity at the site.
Crowe Horwath, for its part, will determine whether the tax increment finance district in which the site lies, which includes I/N Tek and I/N Kote, is able to support the plant's infrastructure needs, as determined by Herceg & Associates.
As of Friday, the district, which captured about $1 million in property tax revenue this past year, had about $4.3 million in its allocation fund and no outstanding debts, according to information provided by the auditor's office.
Development Partners, based in White Plains, NY, announced in March that it planned to build a natural gas power plant in Olive Township on the former Allegheny site.
According to McMahon, the company is in the process of closing on contracts with electricity buyers and hopes to have the plant under construction by 2012 and up and running no later than 2014.
Considering that the energy market, which collapsed in the wake of the Enron scandal, is strong again, and that many of the state's coal-fired power plants, under pressure from the EPA, need to be replaced, he described that as an attainable goal.
"A strong market has reappeared for this," he said, "just like back in 2000."
Staff writer Erin Blasko: