COLUMBUS — Stunning several local residents, Wednesday morning American Municipal Power announced it was abandoning plans to build a nearly $3 billion coal-fired power plant in Southern Meigs County with plans to possibly redesign the project as a gas-fired facility.

It appears AMP was caught off guard as well with what it called an “unexpected” 37 percent increase over the indicated capital cost of the project estimated in May of this year. The new, increased cost estimate was revealed this month on a project that’s been in development for six years.

In a press release, AMP stated, “This 37 percent increase over the indicated capital cost estimated in May 2009 made pursuing alternatives, including conversion to natural gas combined cycle and taking advantage of current power supply offers, the best economic decision.”

Meigs County Commissioner Mick Davenport, who has been in office since the project came to Meigs County four years ago, said, “It is absolutely disappointing for our county. We’re still committed to looking at a way something can go on that site and will continue to work with AMP. We don’t understand the particular cost increases that stopped this at this point but we’re not going to stop working towards getting some kind of facility in the county.”

AMP said in its press release it would “explore developing the project as a natural gas combined cycle facility supplemented with market purchases and pursue future enhancements for the project, such as biomass or another advanced energy technology,” AMP added, “The likely conversion will allow AMP and its members the option of utilizing the current project site and benefiting from the development work performed thus far should that be the best option for participants.”

In a statement, Marc Gerken, AMP president/CEO said, “AMP has always firmly stated that we would recommend halting the project if the economics did not favor our participating communities, and a 37 percent target price increase was not acceptable, especially with the softened commodities market for plant equipment and materials, coupled with the softening in the wholesale electric market. Converting the project to a combined cycle plant would allow us to further diversify our portfolio and meet needs for intermediate generation.”

Gerken went on to say, “Contrary to what the activist groups who have opposed this project will assert, this conversion is not the result of their opposition efforts, our position in upcoming permit appeals, or load loss by our members (as the project is designed to reduce existing market exposure rather than to address growth). This project compared favorably to the market until the most recent target price in November.”

The Village of Racine is the closest incorporated village to the proposed plant site. Racine Mayor J. Scott Hill, who said he’d noticed Wednesday morning AMP was taking down the construction cranes which have been parked on the plant’s proposed site, echoed the same emotion of shock.

“It is stunning,” Hill said. “I’m disappointed it’s not going to happen but hopefully the plant can be redesigned into some type of power generation facility and hopefully AMP can utilize the site work they’ve already done.”

“We’re grateful for the support for the American Municipal Power Generation Station project that has been displayed by local, state and federal policymakers,” said Jolene Thompson, AMP senior vice president of member services and external affairs. “Their stalwart dedication has been a critical factor in the project achieving so many milestones. Governor Strickland and the various state agency officials have been both responsive and responsible in their policymaking, and we look forward to working with them as we pursue this conversion and future advanced energy options.”

“We own a valuable electric generating site in Meigs County and will be considering that site for the natural gas combined cycle facility,” explained Gerken. “We look forward to continuing our relationship and discussions with the people in Meigs County who have been so positively engaged in the project over the past four years. We want to extend our appreciation to the property owners, Meigs County Commissioners, Letart Township Trustees, Village of Racine officials, Meigs County Economic Development Office, Chamber of Commerce, Community Improvement Corporation and local residents for their efforts to bring jobs and investment to the region.”

Perry Varnadoe, Meigs County economic director said, “It is extremely disappointing but we will refocus efforts and go out to bring jobs into the county despite this.”

The plant, due to go online in 2013, would’ve employed over 1,000 workers during its construction phase and provided around 160 permanent jobs. It remains unclear whether Meigs County will be home to any new facility AMP may pursue.