Utilities in the South - Second Quarter 2001

QUIZ

How many more power plants were built in the South in 1999 and 2000 compared to how many were built in California between 1990 to 2000? (a) 12 (b) 9 (c) 41 (d) 24. (Answer at bottom of section)

TXU Completes Major Dallas-to-Houston Transmission Line

Dallas-based TXU has officially opened a $62 million, 88-mile transmission line that the utility reported is the largest built in the state during the past two decades. The high-voltage transmission line, which stretches from southwest Dallas County to a Limestone County power plant that serves the Houston area, will double the amount of electricity utility companies will be able to transfer from 2,000 megawatts to 4,000 megawatts. The line's construction was completed one year ahead of the original May 2002 scheduled date, the company said.

Arkansas Electric Cooperative to Triple Plant Capacity

Arkansas Electric Cooperative Corp. recently filed an application seeking approval for a $61 million project to nearly triple the capacity at the Thomas B. Fitzhugh Generative Station near Ozark, Ark. In refurbishing the plant, AECC would add 111.6MWs to the generating capacity. AECC is also building a $57 million, 153MW natural-gas-fired combustion turbine power plant near Fulton, Ark.

Economic Developers in Memphis Work Closely with Utility

The Memphis area recorded a record $1.8 billion in growth last year. And efforts by Memphis Light, Gas & Water (MLGW) is part of the reason for the growth. MLGW has its offices in the Memphis Area Chamber of Commerce's headquarters, and the two entities work very closely. MLGW acts as a site location consultant. Companies want to know not only the costs associated with a location, but how the utility company can serve their needs at the site. The Chamber and MLGW work together to gather and compile information. MLGW acts as a researcher, collecting information from across the country. For example, MLGW gathered information on the natural gas crisis and how it would affect Memphis area businesses. The state of Tennessee conducts regular wage surveys, which MLGW bundles with utility and real estate information. The Chamber conducts quarterly cost of living surveys across the region, and MLGW puts the figures together. Between the two entities, economic developers are able to answer a prospects questions about wages, the size of the labor force and the availability of buildings. MLGW acts as a clearinghouse for real estate information, keeping a database of available industrial, office and retail spaces.

FPL Energy Building Kansas Wind Farm

FPL Energy LLC will build and operate the largest wind project in Kansas and will sell the electricity output to UtiliCorp United under a multi-year contract. FPL Energy, based in Juno Beach, Fla., will construct 170 wind turbines at a site in Gray County about three miles east of Montezuma in southwestern Kansas. The turbines will have a generating capacity of 110 megawatts, providing enough electricity to power about 33,000 homes in Kansas and Missouri.

Charlotte's Duke Energy Denies Overcharging

Duke Energy denies overcharging the operator of California's power grid for energy supplied during emergencies in January and February. In a compliance filing with the Federal Regulatory Commission, Charlotte-based Duke claims the prices it bid reflected market conditions. The bids included a credit premium to cover the risk of nonpayment by the California Independent System Operator and the California Power Exchange. The credit premiums were largely responsible for bids exceeding FERC-determined prices. Duke has received only a small portion owed by the Independent System Operator and Power Exchange.

Texas Plans Ahead for Deregulation

California, and its energy supply problem, has caused Texas to focus on ways to prevent the same thing from happening there. A big part of the problem California faces is that power plant developers don't want to risk building in the state, mostly because of a lengthy permitting process. The Texas Legislature came up with a deregulation plant that lets the plants come online well ahead of the retail deregulation next year. So whereas California has no reserve margin for this summer, Texas projects a summer reserve margin of 24%.

Enron Hears Complaints About Proposed Power Plant in Pompano

Enron is facing a very vocal group in Pompano against the company's plans to build a 510 megawatt power plant next to Florida's Turnpike near Sample Road. At a recent meeting at the Pompano Beach Civic Center, 500 people were there protesting with signs against the plant. U.S. Rep. Robert Wexler, D-Florida, was also there speaking against the project, asking the Department of Environmental Protection to consider public health over the needs of energy production. Enron spokesman, Eric Thode, appeared irritated at the meeting, claiming that Enron's position had already been explained and that the energy created by the plant would not leave Florida, and that the facility would not be operated unless the utility needed electricity.

Georgia or Alabama May Get New Nuclear Plant

Although it's been almost 30 years since the government has licensed a new nuclear power plant, Southern Company may seek permission to build one in Georgia or Alabama. Southern is considering applying for a federal license to build a new plant on the site of one of its existing power plants. The Atlanta-based utility conglomerate is one of several power companies considering building nuclear power plants because of the California energy crisis and a round of pro-nuclear legislation in Washington, D.C. Soaring fossil fuel prices and a new political climate in the nation's capital appear to be reviving the nuclear industry. The 1979 accident at the Three Mile Island nuclear power plant in Pennsylvania, which was a near meltdown, drastically slowed the momentum of the nuclear industry.

Duke Energy Proposing $400 Million Power Facility in Rowan, North Carolina

Duke Energy Corporation has asked permission from North Carolina regulators to build a $400 million power generation facility on the Yadkin River near Spencer, on the site of an existing coal-powered plant. Duke officials say the site is one option they are considering for building a 640-megawatt peak power generation facility, which would be operated only during times of high energy usage. An alternative would be to build the plant on 150 acres Duke bought last year near Blacksburg, S.C. Engineering studies and permitting requirements will determine which site is best suited for the plant. If Duke chooses Rowan County, it would increase the number of proposed new electricity plants there to three, representing investments of more than $1 billion. Carolina Power & Light Company is building a $400 million natural gas-fired plant west of Salisbury. Less than two miles away, Entergy Power Generating Corporation is building a $300 million, 900-megawatt plant. Duke spokeswoman, Becky McSwain said the convergence of a natural gas pipeline and Duke power transmission lines makes that section of Rowan County a prime site for a peaking plant.

Calpine Corporation to Open New Power Plant Near Houston

Calpine Corporation, a California-based independent power producer, will build a 1,000-megawatt natural gas-fired power plant in Deer Park, Tex. The project will ba a merchant plant, supplying steam to Shell Chemical Co. and selling the generated electricity on the open market. The project is the fifth in the Houston area and the 10th in Texas. Most are co-generation facilities providing steam to industrial customers and electricity for co-op customers, or for sale on the open market. Calpine sells the capacity of all plants within the Electric Reliability Council of Texas on a system-wide basis. The company estimates that 75 percent of its system-wide capacity -- including plants not yet completed -- is already sold through 2001, with 50 percent sold through 2002.

Florida Power & Light Needs More Plants

Juno Beach-based Florida Power & Light Company (FPL) projected it would have a 20 percent generating reserve margin for this summer's power demand, but predicted it would need six new power plants, rather than three, by the end of the decade. The projections were part of an annual report that FPL filed with the Florida Public Service Commission, which outlines new FPL power plants entering service this year, in construction and nearing completion, or planned for the future. The plan also includes purchases of power and demand-side management and conservation programs. For 2001-2010, FPL's update to the commission projects an increase in capacity resources of 33 percent. During that same period it expects to add 700,000 customers, requiring six future FPL power plants instead of the three it predicted in last year's update.

FPL and Entergy Call Off Merger

Florida's FPL Group and Louisiana's Entergy Corporation have called off their $7 billion merger, which would have resulted in the largest power generating company in the U.S. FPL cited discrepancies in Entergy's financial forecasts and Entergy's repeated refusal to provide its financial documents as the main reasons for the halt. Both companies have agreed not to seek a termination fee under the terms of the merger agreement. Under the terms of the merger announced in July, 2000, and approved by shareholders in December, FPL and Entergy would form a new holding company which 57 percent would have been owned by FPL shareholders (who would have received one share for each of FPL's 170.5 million shares) and 43 percent owned by Entergy shareholders (who would have received 0.585 of a new company share for each of their 228.1 million shares). Entergy said that its board was advised by financial advisers that "with no premium to shareholders as part of the deal, and with a revised management structure, the transaction was equivalent to a takeover without a premium."

Duke/Fluor Daniel to Build Five New Power Plants

Duke Energy Corporation's Duke/Fluor Daniel engineering and plant-services joint venture will build five power plants in Arkansas, Arizona, Georgia and Ohio. The gas-powered plants include the 1,240-megawatt Murray Generating Facility in Murray County, Georgia. The plant is expected to open in mid-2002. The projects are part of Duke's effort to add 6,000 megawatts of power in North America by 2002.

FPL Energy to Build Alabama Power Plant

FPL Energy, a subsididary of FPL Group, will build, own and operate a 624-megawatt, natural gas-fired power plant in Calhoun County in northeastern Alabama. Electricity generated at the new power plant, located just outside Anniston, will be sold primarily under contract to Alabama Power Company, a subsidiary of Atlanta-based Southern Company. The plant will have the capacity to power approximately 500,000 homes in the region. Construction of the simple-cycle combustion turbine facility will begin later this year with completion expected by summer 2003.

Fort Mill, S.C. May be Site of GridSouth's $20 Million Headquarters

GridSouth, an organization being formed by the region's Big 3 electric power producers is looking in the Fort Mill area for a $20 million headquarters location that would employ 165 office workers. The executives of the organization are looking at Kingsley Park, a business park off S.C. Highway 160 at Interstate 77. Kinsley is the site of Willamette Industries $10 million East Coast headquarters. The York County Council recently voted to offer GridSouth a fee-in-lieu-of-taxes agreement that will significantly cut the company's property taxes on the facility. GridSouth was created in October by Duke Energy Corp., Progess Energy Inc. and SCANA Corp. As part of the deregulation of electric utilities, the Federal Energy Regulatory Commission required the utilities to create GridSouth, to ensure that area power producers will have access to energy transmission systems. Under the arrangement, the electric companies will still own power grids but GridSouth will control access.

QUIZ ANSWER

In 1999 and 2000, power companies built (or are building) 41 power plants in the South. That's also 41 more than the number built in California between 1990 and 2000. No power plants were built in California between 1990 and 2000. So, the answer is (c), 41.