Calgary-based TransCanada has adopted the western Canadian’s snowbird lure to the western United States, proposing to build a 575 MW natural gas-fired simple-cycle peaking plant in the midst of the fast-growing Phoenix metropolitan area in Arizona. If the Coolidge project becomes a reality, the facility could become the first generation plant in the state to have access to both the El Paso Natural Gas and Transwestern interstate natural gas pipelines that run east-to-west through Arizona.

An initial open house in the local community to begin a “stakeholder dialogue” process will be held Thursday by TransCanada, leading up to the filing of applications this summer with the Arizona Corporation Commission (ACC) and Pinal County for air permits.

TransCanada is currently in negotiations with one of Arizona’s major electric utilities, Salt River Project (SRP), to take the plant’s entire output. TransCanada hopes to file with state and county officials for the plant’s permits in July, and it will not make those filings until it has a solid power purchase agreement, said Peter Lund, vice president for power development, who spoke with Power Market Today Wednesday.

“This could be the first power plant in Arizona to be connected to both El Paso and Transwestern,” said Lund, noting that the proposed site for the peaking facility is strategically located about 45 miles south of Phoenix in Pinal County. Adjacent to the location is a new 500-kV high-voltage transmission power like SRP is developing, an existing El Paso gas pipeline, and the upcoming Phoenix lateral of the Transwestern system.

“We expect to file in July for a permitting process that will last about a year, begin construction in mid-2009 and start commercial operation of the plant in May 2011,” Lund said.

SRP officials are not saying much about the project other than it is one of the proposals that came in from a request for proposals that the quasi-public-sector utility conducted two years ago. A SRP spokesperson referred inquiries about the Coolidge project to TransCanada in Calgary.

“We’re in the process of negotiating a power purchase agreement with SRP that would have them taking 100% of the output,” Lund said. “If we don’t have the agreement wrapped up by July, we won’t be filing [with the ACC and county]. The 575 MW is a nameplate capacity under absolutely ideal conditions; we won’t be producing that much on-peak in the summer time, but that is sort of a capacity for a cold day in January.”

Lund and SRP both acknowledge that the Arizona utility’s power demand is growing significantly (250-300 MW annually, according to SRP).

“One of the key attractions of our site is that it is adjacent to the 500-kV transmission corridor that SRP is developing right now, and we’ll be directly connected to,” Lund said.

In response to a question, Lund said the proposed Arizona power plant has no ties to the North Baja Pipeline in which Transwestern has a 50% stake with Sempra Energy. “El Paso’s existing pipeline crosses the site, and the site is just a stone’s throw from the terminus of Transwestern’s Phoenix lateral that is currently under construction,” he said. “We expect to have a dual [natural gas pipeline] connection.”

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