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Houston Industries Inks AZ Power Deal

Houston Industries Inks AZ Power Deal

Houston Industries' Wholesale Energy Group (HI) continued to entrench itself into the western energy market by agreeing with the city of Casa Grande, AZ, to build a new 500 MW natural gas-fired power plant. The plant will cost $263 million, and upon completion HI will arrange for the supply of gas and sell the electricity produced from the plant.

The project, named Desert Basin Generating, will provide competitively priced electricity to wholesale markets and to large end-users in Arizona and other parts of the western U.S. The facility will be located 50 miles southeast of Phoenix. It also will supply steam to Abbott Laboratories, a neighboring manufacturing facility. HI said that gas will be transported by El Paso Natural Gas, which is just three miles away from the plant. The company expects to use 80-90,000 MMBtu/d to power the facility. "This project will enhance our successful California generation and trading operations and reinforce our leading position in this rapidly evolving industry," said Joe Bob Perkins, president and chief operating officer of HI Wholesale Energy Group.

In the past year, HI has aggressively pursued the California market. HI Power Generation, which has since become HI Wholesale Energy Group, bought five generation plants from Southern California Edison (SCE), a utility divesting assets in accordance with the state's restructuring plan. These plants account for 3,800 MW of operational electricity in California, according to an HI spokeswoman.

Overall, HI Wholesale Energy owns 17,800 MW of electric generation capacity, 8,200 miles of gas pipeline, and 4,000 miles of gathering lines. It trades 4 Bcf/d of gas and produces 80 million MW-hours of electricity annually.

John Norris

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