Thursday, 09 March 2017 15:54

Weldon Westmoreland facility up for sale

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The Roanoke Valley Power Facility in Weldon is up for sale, the president of Westmoreland Partners confirmed today.

Don Keisling said the facility has been up for sale since the first of the year.
According to the Westmoreland Coal Company’s website, the company announced at the end of December it amended its power supply agreement with Dominion Virginia Power and will no longer be required to operate the Weldon facility.
The move will, as of the first of this month, create cash savings, the company said on its website.
Under the amendment, Westmoreland will begin to provide the required contracted level of energy to Dominion through power purchase contracts, in lieu of providing it by operating the Weldon plant.
“Amending the ROVA contract is a successful step toward our goal of reducing the impact of our non-core assets,” said Kevin Paprzycki, Westmoreland’s chief executive officer. “This amendment allows us to meet our future capacity obligations through purchase contracts, instead of running our ROVA facility.
“By no longer operating ROVA, we will reduce our projected cash flow burn by $13 million through March 2019, with the most meaningful cash savings occurring in 2019. Additionally, we are now more aggressively pursuing the sale of the remaining physical facility. I’d like to thank the team for their great efforts in 2016 which resulted in this transaction.”
Westmoreland continues to anticipate the release during 2017 of nearly half of the $22 million in restricted cash in place at September 30, 2016. This restricted cash serves as collateral for existing ROVA power contracts.
Recent higher power prices are expected to lower the required cash collateral levels.
Weldon Town Administrator Mark Macon had no immediate comment this afternoon.
As of the last countywide reassessment, the plant was more than 50 percent of Weldon’s tax base, county Assessor Shane Lynch said.
“We’ve been aware of it,” Halifax County Board of Commissioners Chairman Vernon Bryant said. “We’ve been trying to help them with that process.”

 

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