Generation

The recent price spikes and generation outages in the Midwestpower market have opened the door wide for the natural gas industryto capture a greater share of the industrial energy market, says asenior economist.

Houston Industries Power Generation Inc. (HIPG) and the WoodRiver Refining Co. (WRRC) agreed to develop a 634 MW gas-firedpower plant at Wood River’s refinery in Roxana, IL.

Texas’ power generation capacity continues to grow with two newmerchant plants, one just coming on line and one announced foroperation in 1999. California-based Calpine Corp. said its 240 MWgas-fired Pasadena 1 Power Plant began producing power for thederegulated Texas wholesale market, just in time to help meet peaksummer power demand. The plant, under construction since 1997, cameon-line three months ahead of schedule and about $21 million underbudget. The $131 million power plant is selling power under short-,mid- and long-term contracts and into the open market. Pasadena 1will generate up to 240 MW.

There will be no shortage of natural gas to fill the new wave ofCanadian export pipeline projects or a future generation offacilities yet to be born, according to veterans of the supplysector north of the international border.

Houston Industries Power Generation (HIPG) completed its $237million acquisition of four gas-fired generating plants totaling2,276 MW from Southern California Edison. HIPG had submitted thewinning bids for SCE’s Ellwood, Mandalay, Etiwanda and Cool Waterplants, which have been renamed Oeste, Ocean Vista, Mountain Vistaand Alta Power, respectively.

Houston Industries Power Generation (HIPG) agreed to buySouthern California Edison’s (SCE) Ormond Beach Generating Stationfor $43 million. Ormond Beach has two gas-fired units totaling1,500 MW, and the deal includes land adjacent to SCE’s Coolwaterplant in the Mojave Desert, which Houston Industries bought inNovember.

Consolidated Edison announced it plans to sell two-thirds (5,500MW) of its New York City electric generation plants in an auctionstarting this summer. Its plants will be divided into threebundles. Each bundle will include a major generating facility-theRavenswood Generating Station in Long Island City, the AstoriaGenerating Station in Astoria, or the Arthur Kill Station on StatenIsland-and gas turbine generating facilities in Queens andBrooklyn. The company plans to sell two of the bundles throughauction and retain the remaining bundle, which has not yet beenidentified. It expects to receive authorization from the New YorkState Public Service Commission (PSC) by July 1. The auctionprocess would begin later that month, with the winning bidders tobe announced in January 1999.