Continuing a flurry of activity since its proposed merger withSempra Energy fell through (See related story), KN Energy was at itagain Friday as its marketing affiliate, KN Marketing, announced itwas selected to provide gas and fuel management services to a 600MW power plant in Elwood, IL. KN will supply 10 Bcf/year to thisplant at an undisclosed price. The Colorado-based company will alsomanage the plant’s fuel service, including supplying, balancing andmanaging storage and transportation.

“The high efficiency and flexibility of gas-fired generationrepresents a major growth opportunity for KN and our industry. TheElwood Plant is one of several growth projects we’re pursuing toleverage off our NGPL pipeline, which extends through areas of theMidwest that are experiencing increased economic development and,in turn, increased power demand,” said Doug Schantz, executive vicepresident of commodity marketing for KN.

KN said the NGPL pipeline will be used to transport gas to theplant. The Elwood Energy facility, owned by a joint venture betweenPeoples Energy Corp. and Dominion Resources called Elwood EnergyLLC, is located about 60 miles southwest of Chicago. In April,multi-year contracts were signed for 100% of the facility’selectric power generation.

Steve Salato, vice president of KN Marketing in the Midcontinentregion said a main advantage of this deal is that it might lead toothers like it. “KN’s role as fuel manager for one of the firstmerchant power projects positions us well to exploit similaropportunities in this high-growth industry segment.”

The Elwood Energy facility will begin commercial operations inJuly 1999. It is one of the state’s first merchant power stations.

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