Generation

Sempra Energy Resources, the independent power generationsubsidiary of Sempra Energy, announced plans to build a $350million, 600 MW power plant near Mexicali, Baja California, Mexico.The plant, known by its Spanish name, Termoelectrica de Mexicali,will be connected to the U.S. electric grid via a new, 230,000-volttransmission line. “Electricity from this new power plant can helpalleviate California’s energy crisis,” said Donald E. Felsinger,group president of Sempra Energy. “Energy is the lifeblood of theCalifornia/Baja California region’s economy. This power plant —along with our North Baja Pipeline — will help ensure that theborder region has adequate infrastructure to meet its future energyneeds.” The company decided to build the plant near Mexicalibecause of its proximity to a source of natural gas for fuel —the North Baja Pipeline, which begins construction this summer —and to the Southwest Powerlink, a high-voltage transmission lineconnecting California and Arizona. The power plant is expected tobegin operations in the summer of 2003, one year after the NorthBaja Pipeline is due to begin delivering natural gas to the region.The North Baja Pipeline – a $230 million, 215-mile pipeline jointlybeing developed by Sempra Energy International, PG&E Corp.’sNational Energy Group, and Proxima Gas S.A. de C.V. of Mexico -will bring natural gas from the Arizona border to fuel businessesand new power plants being built in Baja California.

International power producer AES Corp. announced a plan to scarfup the assets of Thermo Ecotek Corp., a subsidiary of ThermoElectron Corp. of Waltham, MA, for $195 million in cash, plusadditional closing adjustments that currently amount to another $15million. Thermo Ecotek builds and operates power plants and ownsgas storage assets. Its portfolio includes 516 MW of gas-fired,biomass-fired (agricultural and wood waste), and coal-fired powerplants in the United States, the Czech Republic, and Germany, aswell as a natural gas storage project in the United State and over1,250 MW of advanced development power projects in the UnitedStates. The transaction is likely close during the third quarter.

Southern Company launched a new subsidiary, Southern Power Co., last week that will own, manage and finance wholesale generating assets in the Southeast. The subsidiary will market to wholesale customers in the fastest-growing wholesale electricity market in the country, the company said.

Pennsylvania-based PPL Corp. has recently taken on a “Go West”theme, as evidenced by its plans to build 1,800 MW of newelectricity generation on the left coast at an estimateddevelopment cost of $900 million.

Dominion is on course to add 1,100 MW of natural gas-firedgeneration to its electric portfolio in Pennsylvania by the secondquarter of 2004 to help meet growing energy demand in the region.The merchant power facility will sell competitive energy to buyersin newly opened wholesale markets.

In an effort to hold off power supply shortages until largerelectricity generating plants come online, the New York PowerAuthority (NYPA) reported that it has selected sites within NewYork City for nine of 11 natural gas-burning generators itpurchased from General Electric Packaged Power.

Calpine Corp. added 700 MW of New England power generation toits portfolio on Friday by purchasing assets from Dartmouth,MA-based Energy Management Inc. (EMI) for $145 million and theassumption of about $220 million of project financing.

More power generation, more competitive choices for customersand less regulation are the keys to limiting power price increases,according to the Electric Power Supply Association (EPSA), and theNational Energy Marketers Association (NEM), which are mountingseparate attempts to diffuse growing public outrage over energyprice increases.

More power generation, more competitive choices for customersand less regulation — not more — are the keys to limiting powerprice increases, according to independent power producers,attempting to diffuse growing public outrage over price increases.