NRG Energy Inc. bought a 50% stake in Conoco Inc.�s cogeneration plant located at DuPont Co. Sabine River Works petrochemical facility in Orange, Texas.
The 420-Mw power plant will cost $260 million and be in service by summer 2001. The exact amount of NRG�s investment was not disclosed. But the company said it expects contributions from the plant to contribute positively to earnings after commercial operations begin.
The cogeneration plant is 50% complete. Conoco and NRG will sell power and steam to the host manufacturing facility and a certain amount on a long term contract to PG&E Energy Trading. The balance of the power will sold in the merchant market. How the megawatts were divided among final customers was not disclosed, says Larry Springer, spokesman for Conoco.
The new plant is connected with the Entergy system not ERCOT. Deregulaton is behind because no one champions the cause in Entergy�s territory.
Conoco is a relatively small player in power plant development. The mid-sized oil and gas company only has 1000 Mw since forming its business in 1995. NRG, on the other hand is the fifth largest independent power producer in the world. The company has all or a portion of 63 power generation projects with a net interest in operating power projects of 14,476 Mw
Duke Energy North America (DENA), proposed to manage San Diego Gas & Electric's (SDG&E) 3,300-megawatt electricity load at a fixed price of 6 cents per kilowatt-hour for the next five years. This proposal is based on market prices for electricity and natural gas as of Nov. 17, 2000. DENA's proposal, which takes into account SDG&E's seasonal and hourly load requirements has a 3-percent annual adjustment for inflation. Under DENA's proposal, SDG&E's business and residential customers no longer would be exposed to the electricity price spikes they experienced this past summer when their retail electricity prices often exceeded 18 cents per kilowatt-hour. In addition to stabilizing customers' power bills, the proposal would also eliminate SDG&E's exposure to high wholesale electricity prices and the associated financial uncertainty.
AES Corp., in its first foray into the water business, was awarded the Barka Power and Desalination Project in the Sultanate of Oman. The natural gas-fired, combined-cycle, $425 million facility is expected to supply 427 Mw of electricity and 20 million gallons per day (mgd) of water. Natural gas will be supplied by the Oman Ministry of Gas under a 15 year contract. Electric power and water will be sold to Ministry of Electricity and Water also under a 15-year contract. Construction is expected to begin in April 2001. AES will operate the plant and own a 90% stake. Bahwan group, a local business, will own the remaining 10 percent. Under the terms of the bid, by the end of first year of operation, AES intends to divest 39% of equity in the project to the general public.
Southern Co. said it will seek board of director approval for a complete spinoff of Southern Energy to take place on or about April 2, 2001. Southern Co. previously announced that it intended to spin off its remaining ownership of Southern Energy to Southern Co. shareholders between April and September 2001. Southern Energy is a global independent power producer and an energy marketing and risk-management company. Southern Energy closed an initial public offering of its common stock on Oct. 2. Total gross proceeds to Southern Energy from the initial public offering and an additional securities offering were $1.8 billion. Southern Co. currently holds 272 million shares, or 80.3 percent, of the shares outstanding of Southern Energy. About 66.7 million shares -- or 19.7 percent of Southern Energy -- are owned by public investors.