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Merchant Plants Becoming The Toast of Texas

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 County.

"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 the state."

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 MW.

Joe Fisher, Houston

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