William H. Spence, executive vice president and chief operating officer of PPL Corporation, said the company had evaluated the project in light of current economic conditions and projections of future energy prices, and concluded that it would not be economical to pursue the scheme, whose costs had grown to an estimated US$440M.

The expansion at Holtwood 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 project, PPL had reduced planned capital spending by more than $200M for 2009 in the face of the worldwide financial crisis and the increased cost of financing. PPL will continue other generation expansion projects that are already under construction at other facilities.

The expansion at Holtwood would have included construction of two additional hydroelectric turbine-generators with a combined capacity of 125MW. The existing Holtwood hydroelectric plant has a generating capacity of 108MW and has been operating since 1910.

PPL will continue, subject to necessary regulatory approvals, with its plans to transfer certain company-owned lands in Lancaster and York counties to the Lancaster County Conservancy as part of a broad public-private initiative to preserve land along the Susquehanna River for public use.