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’s depth in development, its transaction and commercialskills, coupled with Duke Energy’s core engineering, procurementand construction competencies, provide speed to market,” said JimDonnell, DENA CEO. “They allow us to identify market opportunitiesand seize them at just the right time to capture value for ourshareholders and efficiently recycle capital across theorganization to support ongoing development and acquisitionactivities.”
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 Engineering & Services is providing support services;Duke/Fluor Daniel will design, construct and operate thefacilities; while Duke Energy Merchants will arrange gas supply andmarket the facilities’ power. Duke Energy’s Texas EasternTransmission will transport fuel to the two plants in Mississippi.The Oklahoma plant will be served by Oklahoma Natural Gas.
The Hidalgo Energy Facility is a 500 MW gas-fired,combined-cycle generation plant in Edinburg, TX. DENA broke groundon the facility this quarter and expects commercial operation tobegin by June. The sale to Calpine is subject to all appropriategovernment approvals. DENA announced the sale of 21.5% of theplant’s electric output to the Brownsville Public Utilities Boardin fourth quarter 1999.
The Hidalgo purchase includes a cash payment of $134 million andthe assumption of $101 million of debt, which represents thecompleted cost of the plant. The Hidalgo Energy Center will sellpower into ERCOT’s wholesale market and potentially into thegrowing markets of northern Mexico. Calpine will operate andmaintain the plant.
Calpine is also 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.
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