NGI The Weekly Gas Market Report / NGI All News Access

New Calpine Unit Focuses on South's Wholesale Power Markets

Against the backdrop of rapid growth in the Southeast and a plethora of request for proposals (RFP) coming from that part of the country, Calpine Corp. last week lifted the veil on a new subsidiary called NewSouth Energy LLC in order to better focus on wholesale power customers and energy markets in the South.

Based in Atlanta, NewSouth Energy will help to meet the real-time and long-term energy requirements of its customers, including utilities and other load-serving entities, Calpine said. The unit is already up and running with a staff of 11 people, Calpine spokesperson Crystal Walker told NGI.

"When you look at the Southeast, it's one of the fastest growing regions in the country," Walker said in explaining why the generator decided now was the right time to form NewSouth.

She also pointed out that parts of the region are examining power plant retirements and, in Georgia, the state has "taken the lead in creating a very progressive procurement process that allows for an independent evaluator to actually be a part of the process."

Walker said that "with all of those changes in play, and a lot of RFPs coming out of this region at this time, this is the exact moment that Calpine should be focusing on this region to ensure that the most value is garnered from the assets that we have in this region."

Indeed, the same week of Calpine's announcement, Georgia Power Co. disclosed that the utility and its affiliate Savannah Electric and Power Co. expect to issue a RFP for approximately 1,200 MW this July.

With respect to power plant retirements in the region, Walker noted that the Louisiana Public Service Commission (LPSC) has commissioned a plant retirement study, which should be made public early next month. "There is without question...old gas-fired units in that area that need to be retired. What that independent study is supposed to do is conclusively give an idea as to what exactly needs to be done to help push the situation in the right direction."

NewSouth Energy's service territory spans 11 southeastern states. NewSouth Energy will serve wholesale power customers in all or parts of Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas and Virginia.

Walker said that NewSouth will be "part of the process that will help" to foster a "more competitive, transparent procurement process within the states in this region." While Georgia has moved forward with a new procurement process, there are other states "like Louisiana, which has an independent monitor -- almost there, but not quite. And then you've got states like South Carolina that don't have any procurement process whatsoever."

The company will serve customers through a network of more than 7,000 MW of natural gas-fired power plants in operation or under construction in the South. This includes 3,000 MW of cogeneration that supports the manufacturing of a variety of industrial and consumer products, ranging from plastics to orange juice.

"This new energy company reinforces Calpine's commitment to customers throughout the South," said Calpine Chairman Peter Cartwright in a prepared statement. "Its mission is to meet the strategic and diverse energy needs of this dynamic power region. We've brought together a seasoned and talented team with in-depth experience in every aspect of power generation. They bring to customers years of experience in serving some of the largest regulated and unregulated energy companies in the South."

NewSouth Energy President Michael Bradley said, "By realigning resources and increasing efficiencies, we are now able to focus our efforts solely on providing immediate and long-term value to our customers in the South." He said the company's strength is its connection to the community. "We are from the South. We live and work in the areas we represent in the South. And we know our customers and understand their unique energy needs."

Further expansion of NewSouth's staff could be in the offing. When asked if there is a mindset that new hires at the unit are waiting in the wings, Walker said, "I would say, you could say yes to that."

©Copyright 2005 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus