Peoples Energy and Dominion Energy announced they plan todevelop and operate a 300 MW gas-fired electric generating peakingfacility near Elwood, IL, 60 miles southwest of Chicago. The $90million project is expected to be completed in time to providepower to the grid in summer 1999.

The plant is expected to be connected to multiple gas lines andCommonwealth Edison’s electric transmission lines. “ComEd has beenvery cooperative as we work toward tying into their transmissiongrid,” said Thomas Patrick, executive vice president of PeoplesEnergy. “The Elwood plant will offer an added source for electricpower and enhanced supply reliability for northeastern Illinois,including Chicago.”

The project marks People foray into the merchant power plantbusiness. A spokesman said the Chicago local gas distributor wasattracted by recent moves in the state toward electricrestructuring. But its entry into merchant plant development alsois part of an overall diversification strategy, which includesincreasing activity in oil and gas exploration, electric powergeneration and the midstream energy business. Peoples has targetedto achieve 25% of its earnings from nonutility activities by 2002.

For Dominion, the deal “represents an extension of our strategyto grow our power generation and natural gas businesses in theMidwest and Northeast, home to about 40% of our nation’s demand forenergy,” said Dominion CEO Thomas N. Chewning.

The two companies are finalizing a turnkey commitment with GEPower Systems for two turbine-generator sets and construction ofthe facility. Rocco Canonica

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