A unit of Enron and the heavily industrialized East SanFrancisco Bay area suburb of Pittsburg, CA, are teaming up with aninternational steel mill to pursue a $250 million, 500-megawattnatural gas-fired merchant power plant. By mid-May, Pittsburg’scity council will decide whether the city should take an interestin the privately financed proposal.

In anticipation of the opening up of electricity markets inCalifornia, Pittsburg’s city government in 1996 formed its ownmunicipal power company, Pittsburg Power Co., although itsresidents and businesses continue to be served by the localinvestor-owned utility, Pacific Gas and Electric. Then, last year,Enron Capital and Trade formed an alliance with the city, whichincludes some of the largest industrial operators in northernCalifornia.

With the approval from the city government, Enron will apply inmid-June to the California Energy Commission, which must approveall electric generating plants in excess of 50 megawatts. Approvalfrom the CEC could take up to a year, so the earliest the Pittsburgplant could be in operation is 2001, according to an Enronspokesperson.

As proposed, the combined-cycle plant would be a cogenerationfacility in conjunction with a steel plant, jointly owned by USSteel (USS) and a Korean company, Pohang Iron and Steel (POSCO).The USSPOSCO plant would take up to 15% of the plant’s output. Italso will produce 600,000 pounds/hour of process steam through aheat recovery system.

Enron is still in the process of negotiating for the plant’sfuel requirements. Substantial gas supplies will be obtained, alongwith a transportation deal with PG&E to deliver the gas.

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