PPL Corp. announced Dec. 9 it has canceled plans to develop the 88.3-MW Holtwood Expansion hydroelectric project, citing unfavorable economic conditions.
PPL said it withdrew an application filed with the Federal Energy Regulatory Commission for the Holtwood Expansion, effectively canceling the project. The announcement followed an earlier report PPL was re-evaluating its schedule for developing the Holtwood Expansion, an addition to the 107.2-MW Holtwood hydroelectric project on Pennsylvania’s Susquehanna River. (HNN 11/25/08)
ï¿½As we evaluated this project in light of current economic conditions and projections of future energy prices, we reached the conclusion that it is no longer economically justifiable,ï¿½ PPL Executive Vice President and Chief Executive Officer William Spence said.
Estimated construction costs for the Holtwood project, recently placed at about $300 million, had grown to $440 million, PPL said. The high cost of capital has significantly affected the economics of large construction projects like Holtwood Expansion, Spence added.
Holtwood Expansion had been included in PPL’s capital budget. Construction was expected to begin in 2009, assuming receipt of necessary approvals and permits. The expected in-service date was 2012. Spence noted that even prior to the decision to cancel the Holtwood Expansion, PPL had reduced planned capital spending by more than $200 million for 2009 in the face of a worldwide financial crisis and increased costs of financing.
PPL said it withdrew the application, filed by its subsidiary PPL Holtwood LLC, which sought to amend the project license to increase installed capacity and to extend its current license term for 16 years, through Aug. 31, 2030. The existing license for operating the Holtwood project (No. 1881) is scheduled to expire Sept. 1, 2014.