Aquila Swapping Gas, Power in MS
UtiliCorp subsidiary Aquila Energy contracted for the option to
provide gas in exchange for power at one of three combined cycle
power units being built in Batesville, MS, by LSP Energy Limited
Partnership. The unit is expected to go on line by summer of 2000.
Under the initial 15-year agreement, Aquila will provide gas to run
the unit, and in exchange LSP will provide Aquila the power and
"This unit will provide us with a competitive supply of
electricity that we can leverage into the rapidly growing southern
economy," said V.J. Horgan, senior vice president of power
wholesaling for Aquila. "It will give us a great deal of
flexibility in dealing with our customers and will enhance our
position as a large and innovative player in the marketplace. The
plant will be connected to the Tennessee Valley Authority and
Entergy Mississippi. Total capacity of all three units at the site
is 837 MW.
Aquila will have full operational control of the unit and does
not have to provide gas unless market circumstances make it
advantageous to do so. The initial term of the agreement is 15
years, and Aquila has the option to extend it. Horgan said the
company has recognized the value of controlling generation assets
and is looking to do more deals of a similar nature. "We'd love to
do tolling type deals. We're actually looking at a host of other
developers." She said the company is particularly interested in
NERC regions SERC, ECAR, MAIN, as well as SPP and ERCOT.
The project was developed by LSP Energy Limited Partnership. LSP
Energy, an affiliate of LS Power LLC of East Brunswick, NJ,
develops and owns independent power generation facilities in the
Joe Fisher, Houston
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