Duke Energy North America (DENA) announced the start ofconstruction of three new merchant generation projects totaling1,500 MW. At full capacity, each plant will burn about 3,300MMBtu/hour. In a fourth deal, DENA announced the sale of itsremaining 78.5% interest in the 500 MW Hidalgo Energy Facility toan affiliate of Calpine Corp. for $235 million.

DENA’s portfolio currently includes 4,400 MW in operation; ninesites under construction totaling 4,500 MW; and an additional14,800 MW in advanced development, scheduled for commercialoperation by summer 2003.

DENA is constructing three new 500 MW gas-fired, combined-cycle, generating plants to serve growing demand and reliabilityneeds in the southeastern and south-central United States.Construction has begun on the McClain Energy Facility in Newcastle,OK; and the Hinds Energy Facility in Jackson, MS; and will soonbegin at the Attala Energy Facility, located between McAdams andKosciusko, MS.

All three plants will be operational by second quarter 2001.Duke Energy’s Texas Eastern Transmission will transport fuel to thetwo plants in Mississippi. The Oklahoma plant will be served byOklahoma Natural Gas.

The Hidalgo Energy Facility being sold to Calpine is a 500 MWgas-fired, combined-cycle generation plant in Edinburg, TX. DENAbroke ground on the facility this quarter and expects commercialoperation to begin by June. The Hidalgo purchase includes a cashpayment of $134 million and the assumption of $101 million of debt,which represents the completed cost of the plant.

Calpine also is building a 730-MW natural gas-fired facility inEdinburg, to serve the South Texas market. The Magic Valleyfacility is expected to be on line in the summer of 2001.

Joe Fisher, Houston

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