Merchant Plants Becoming The Toast of Texas
Texas' power generation capacity continues to grow with two new
merchant plants, one just coming on line and one announced for
operation next year.
California-based Calpine Corp. said its 240 MW gas-fired
Pasadena 1 Power Plant began producing power for the deregulated
Texas wholesale market, just in time to help meet peak summer power
demand. The plant, under construction since 1997, came on-line
three months ahead of schedule and about $21 million under budget.
The $131 million power plant is selling power under short-, mid-
and long-term contracts and into the open market. Pasadena 1 will
generate up to 240 MW.
West Texas Utilities, a Central and South West Corp. operating
company, is buying 50 MW of capacity through the end of 1998. In
September, Pasadena 1 will begin providing 90 MW of electricity and
200,000 pounds/hour of steam to Calpine's anchor tenant, the
Phillips Petroleum Houston Chemical Complex. Calpine is selling
power to the open market and under short-, mid- and long-term
contracts. Texas Utilities Electric Co. will also participate in
the Pasadena 1 power marketing program, purchasing up to 150 MW of
electricity under a two-year agreement beginning Dec. 1, 1999.
More merchant capacity is yet to come. CSW Energy Inc., a
subsidiary of Central and South West Corp., plans to begin
construction next month of a 500 MW merchant plant in the Rio
Grande Valley of Texas. The gas-fired, combined-cycle facility is
to be on line by the end of 1999. Additionally, part of the
facility, two 170 MW gas turbines, will begin partial operation by
summer 1999. Cost is expected to be $200 million. The project,
known as Frontera, will be near the city of Mission in Hidalgo
"The Rio Grande Valley has seen rapid growth over the last few
years and is expected to need more power to meet its requirements,"
said Terry Dennis, CSWE CEO. "Although announcements of other power
plant projects recently have been made to address this shortage,
CSWE's Frontera project is the only one with the potential to begin
operation by the 1999 summer peak season. By locating the Frontera
Project in the Valley, we expect to improve the reliability of the
Valley's electric system and be able to supply customers throughout
Frontera will be CSWE's third merchant plant in Texas. In April,
CSWE dedicated the Sweeny Cogeneration Facility, Brazoria County.
The 330 MW plant provides 90 MW of electricity to Phillips
Petroleum Company's nearby refining and petrochemicals complex and
offers the remainder of its capacity to electric utilities and
power marketers on a merchant basis. The Newgulf Project, near
Boling, Texas, which began commercial operation in 1997, is the
state's first exempt wholesale generator, intended to take
advantage of power market fluctuations. The plant is generating 85
Joe Fisher, Houston
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