Nov. 4--The proposed $440 million expansion of PPL's Holtwood hydroelectric plant has moved a step closer to reality.

The Federal Energy Regulatory Commission has approved the plan and extended the facility's operating license from 2014 to 2030, the company announced Tuesday.

However, for the project to go forward, PPL still needs the U.S. Department of Energy to award it about $100 million in tax credits and loan guarantees.

Assuming the project secures the economic-stimulus funds, construction could start in the first quarter of 2010. Construction would take three years.

The Holtwood project, which would add 125 megawatts of generating capacity, enough to serve 100,000 more homes, to the 108-megawatt location, has an off-and-on history.

PPL unveiled its plan to expand the plant in March 2006, estimating at that time that the venture would cost $250 million.

PPL then canceled the project in December 2008, citing an increase in the price tag to $440 million.

But after the federal government enacted economic-stimulus funding for such renewable-energy ventures, PPL revived the project in April -- assuming FERC and DOE go along.

PPL would use the tax credits and loan guarantees (which reduce borrowing costs) to offset the run-up in the project's cost.

The Holtwood plant has been generating electricity since 1910, using the power of Susquehanna River water held back by a 55-foot dam. The dam also created Lake Aldred, an 8-mile reservoir.

Besides the extra power, the proposed expansion would improve fish lifts at the plant to aid migratory fish passage.

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