The $1.1 billion natural gas power station Dominion Virginia Power is building in Warren County will generate more than electricity. It’s expected to produce millions in tax revenue for the county each year, County Administrator Doug Stanley said during a groundbreaking ceremony Thursday morning.

Stanley was one of several speakers, including Lt. Gov. Bill Bolling, at the site in the Warren Industrial Park.

In 2013, Dominion’s property tax bill is expected to be $1 million, with that increasing to $1.7 million in 2014, Stanley said. The gross tax payments are expected to be $5.6 million each year for the first 10 years it’s open, with the county hoping to net around $4 million per year, he said.

“What a beautiful exciting time for the town of Front Royal and Warren County,” Front Royal Mayor Timothy Darr said during the ceremony. “The town of Front Royal is providing the water for this project. Dominion Power will be one of our largest water users when the plant is completed.”

Working out an agreement with the power company was taken very seriously by the Town Council, he said.

“I think at the end of the day, we’ve established a good business partnership,” Darr said.
Front Royal will charge Dominion in-town water rates — the site is about 3 miles out of town — for the first five years. The county has agreed to pay $1 million annually for the next five years, when the company will be charged the out-of-town rates, Stanley stated in a Thursday afternoon email.

Dominion Generation CEO David Christian said of all the various types of power plants the company has in different states, the 1,300 megawatt natural gas power station “is the most efficient facility in our fleet.”

According to Dominion Generation’s website, the plant will have three combustion turbines and a steam turbine, and produce enough electricity to run about 325,000 homes.

While the groundbreaking ceremony was Thursday, work at the site actually started in March, according to the website.

At the height of construction, about 800 people will be working at the site, Christian said. About 30 employees are expected to be at the plant full time after completion.

Construction should be done by late 2014, Christian said.

“This is a part of our strategy for meeting the growing energy demand in the state of Virginia,” he said. “I pledge to you we will be more than just a good corporate citizen. We will be a good neighbor.”

Board of Supervisors Chairman Archie Fox said when he’d heard Competitive Power Ventures planned to build a plant at the site that would generate $1.5 million in revenue for the county 11 years ago, it felt like Santa was coming to town. Nothing came of those plans, though.

“So, we thought Santa Claus had got lost,” Fox said.

With construction beginning on the Dominion plant Fox stated he could say there is a Santa Claus, and he’s in Warren County. The jobs that go with the plant building project are “just the shot in the arm our county needs in these tough economic times,” he said.

With the tax revenue generated by the plant, Warren County hopes to fund several capital-improvement projects, including a new middle school and the renovation of a former school into office space, Stanley said.

“This is a great day for the Front Royal-Warren County community,” he said. “[We have] not sacrificed the protection of the environment for tax dollars.”

Dominion has agreed to shut down the 74-megawatt coal-powered North Branch Power Station in Bayard, W.Va. in exchange for getting an air permit from the Virginia Department of Environmental Quality for the Warren County facility, according to its website.

That and other emissions reductions are expected to lessen acid rain falling in nearby Shenandoah National Park.

Lt. Gov. Bill Bolling, who serves as Virginia’s Chief Jobs Creation Officer, also praised the project Thursday morning.

“From an economic development and a job creation standpoint, this is a wonderful project,” he said. “We’re very fortunate in Virginia today that our economy is doing better than almost any other state in the country. [Dominion] is a great Virginia company who has chosen to make a major capital investment in Virginia and help us create jobs in our state.”

Bolling said he and Gov. Bob McDonnell hope to make Virginia the East Coast energy leader, and the new plant is a big step in that direction.

“We want to expand coal because we’re the Saudi Arabia of coal in Virginia,” he said.

Nuclear power and offshore drilling are also important, the lieutenant governor said.

“But, we also want to be a leader in alternative forms of energy,” he said. “Here, we have a natural gas project, a very good project from an energy production standpoint and from an environmental preservation standpoint. It’s a win for Warren County and for Front Royal.”