Panda Power Funds has financed the 1,124 megawatt Panda “Hummel Station” power plant — one of the largest coal-to-natural gas power conversion projects in the United States.
The plant will be located at the site of the retired Sunbury coal-fired power plant near Shamokin Dam in Snyder County, Pennsylvania. The 400 MW, 65-year-old plant was shuttered in 2014 in response to low natural gas prices and the onset of strict environmental regulations promulgated by the Obama Administration.
The Panda Hummel generating station will be fueled with Marcellus Shale gas, which is expected to provide the project with a significant operating cost advantage. The plant is expected to supply large power markets, including Philadelphia and the New York metropolitan area, when it enters commercial operations in the first quarter of 2018.
Goldman Sachs, ICBC and Investec acted as joint lead arrangers for the senior debt financing of the plant, raising Term Loan A and Term Loan B debt capital totaling $710 million.
The Term Loan B debt received an initial credit rating of BB- and a “1” recovery rating by Standard & Poor’s. The Panda Hummel transaction marks the seventh financing of a new, large-scale power facility by Panda Power Funds in three-and-a-half years, representing approximately $6 billion in total combined capital.
Panda Power Funds is supplying equity for the project along with large institutional co-investors including Siemens Financial Services which is investing $125 million in the Hummel Station plant.
Todd W. Carter, president and senior partner of Panda Power Funds, said:
“The natural gas revolution has arrived in the heart of coal country. I’m proud Panda is leading the way toward clean natural gas-fueled generation. We’re ready to take what we’ve learned in Pennsylvania and apply it to other coal-fired projects across the nation.”
Panda Power Funds selected a construction consortium of Siemens Energy Inc. and Bechtel Power Corp. to build the Hummel facility on a turn-key basis. Siemens will provide the power island package including the natural gas turbines, steam turbine, generators, heat recovery steam generators, and instrumentation and controls systems. The turbines for the Hummel generating station will be manufactured at Siemens’ manufacturing facility in Charlotte, North Carolina.
Bechtel will be responsible for the engineering and procurement for the balance of the plant, and the installation, construction and commissioning of the facility.
The Panda Hummel Station power plant will access natural gas through the MARC 1 and Transcontinental regional gas pipelines. Hummel Station will benefit from its close proximity to the Susquehanna-Roseland Electric Reliability Transmission Project, a recently completed 146-mile, 500 kV electric transmission line that was one of seven nationwide projects fast-tracked by the Obama Administration’s Rapid Response Team for Transmission.
The generating station will be located on the west bank of the Susquehanna River in Shamokin Dam Borough on the site of, and immediately adjacent to, the retired Sunbury coal plant. The Panda Hummel power plant will utilize existing infrastructure at the site for the electrical interconnection, water intake and storm water runoff systems. Construction will take approximately 30 months.