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Williams to Supply Gas and Market Power for AES Plant

Williams to Supply Gas and Market Power for AES Plant

Similar to a deal the two companies made last May involving three power plants in the Los Angeles Basin, Williams and AES forged an agreement last week in which Williams will supply the fuel and market the power produced from an AES-built and -operated power facility in Pennsylvania. The AES Ironwood plant will be located in South Lebanon Township and will have a capacity to produce 700 MW. Financial terms of the transaction were not disclosed.

"The growing Pennsylvania-New Jersey-Maryland power market offers an important opportunity for Williams," said Jerry Gollnick, president of Williams Energy Marketing and Trading Co.

"We're implementing a strategy now that we've been working on for quite some time. We targeted the [Pennsylvania-New Jersey-Maryland] market, and this deal represents the beginning of the implementation phase," said Phil Scalzo, a Williams spokesman. "Over the next few months, expect to hear more about Williams' power deals in this market."

AES will begin construction on the Ironwood facility this quarter. Service is expected to begin in the second quarter of 2001. A Williams spokesperson said the facility will burn 100 MMcf/d.

The two companies made a similar agreement in May, but were dealing with already-constructed facilities and much bigger volumes. Through the first deal, Williams gained access to 4,000 MW to market and 250 MMcf/d of gas to supply. In 1998, these facilities burned 50 Bcf.

"As a direct result of the California deal, Williams was put on the map as a power player," Scalzo said. "Deals in other areas quintupled as a result of this deal." Williams ranked 14th in NGI's power marketer rankings for 1998, a position Scalzo said is directly attributable to Williams' dealings with AES.

John Norris

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