New CMS Plant's Gas Will Move on Panhandle Eastern
At the end of a very busy week for CMS Energy, the company
announced it had struck its first deal for a large power plant to
be fed by gas delivered on Panhandle Eastern Pipeline acquired four
days earlier from Duke Energy.
CMS and DTE Energy Services said the new 550 MW gas-fired
cogeneration project will serve all of the electric and steam needs
of both Rouge Steel Co. and Ford Motor Co. at the Rouge complex in
Dearborn, MI. CMS and DTE, an affiliate of Detroit Edison, will
form a new company, Dearborn Industrial Generation, LLC, which will
build, own and operate a facility with a construction cost of $240
million. The plant will replace the output of the aging Rouge
The deal was in the works for several months, according to a CMS
spokesman, during the same period CMS was negotiating to buy the
Panhandle Eastern and Trunkline pipelines. Part of the thinking
behind that acquisition is the acquired pipes will serve new
generation CMS plans to develop in the Midwest. The new generation
to serve Rouge and Ford will require a new interconnect to
Panhandle and installation of less than a mile of pipe to allow gas
delivery, the CMS spokesman said. The existing Rouge powerhouse is
powered mainly by coal and boiler gas.
CMS Energy's international power subsidiary, CMS Generation,
will hold 70% ownership and manage construction, fuel procurement
and operation of the plant while DTE will own 30% of the project.
CMS Energy signed a letter of intent with Ford and Rouge Steel to
provide up to 400 MW of electricity and 1.7 million pounds/hour of
steam from Dearborn Industrial Generation for a period of 15 years.
Definitive agreements between the companies are expected to be
finalized by December.
The Dearborn Industrial Generation project will be fueled by
about 100 MMcf/d of natural gas and blast furnace gas, a by-product
of the steelmaking process. About 93 MMcf/d will be natural gas.
The plant will use two high-efficiency natural gas combined cycle
units with heat recovery steam generators, three blast furnace
gas/natural gas boilers and one steam turbine to simultaneously
produce up to 550 MW of electricity and 1.2 million pounds/hour of
industrial process and heating steam.
Construction of the plant is expected to begin in the first
quarter. The first gas turbine at the plant is to go on line no
later than mid-2000 and will supply the total Rouge site
requirement. Full operation of the project is scheduled for 2001.
The project is contingent upon local governmental incentives and
finalizing the agreement between CMS Energy, Rouge Steel and Ford.
Joe Fisher, Houston
©Copyright 1998 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.