WILMINGTON, Del., Sept. 21, 2000Conectiv has ordered 21 combustion turbine units from Siemens Westinghouse and General Electric as the next step in its aggressive strategy to establish a leading position in the mid-merit generation market within the PJM power pool.
Mid-merit power plants are environmentally friendly and can start and stop quickly in response for increases in demand for power, which greatly enhances the company’s ability to use its sophisticated energy trading group to optimize and manage generation output to grow earnings.
Conectiv already owns approximately 1,900 MW of mid-merit and peaking generation in PJM. The 21 new combustion turbines will allow the company to achieve its goal of adding up to 4,000 MW by the end of 2004. The company said that it is in the final stages of getting the permits needed to begin construction of an additional 550 MW of combined cycle combustion turbine capacity at the company’s Hay Road power plant near Wilmington.
In addition, Conectiv has taken the initial steps needed to begin developing a number of new power plant sites within the PJM region, including brownfield industrial sites in Bethlehem, PA and Florence Township, NJ. The sales of Conectiv’s fossil and nuclear power plants and the securitization of costs related to industry restructuring are expected to net about $1 billion that will be used to help fund the mid-merit strategy.
Conectiv’s energy trading and asset management team has developed proprietary systems that link its generation, trading, risk management and financial operations. These systems use the most sophisticated e-solutions and technology to extract optimum value and leverage the company’s strategic assets. The combination of Conectiv’s physical assets, in one of the country’s most advanced power pools, and deployment of advanced financial products are helping drive superior financial returns. The company has also made major advances in acquiring fuel assets to support its generation operations, including the acquisition of wholesale oil operations, gas storage assets, transmission assets, and forward gas supply arrangements. The entire portfolio is being managed with sophisticated risk management techniques that are intended to protect earnings and preserve value enhancement opportunities. These same capabilities are being used to manage the electric portfolios of other generators who have recognized Conectiv’s expertise in the PJM and surrounding regions.
“The orders of these new combustion turbines represents a major step in our effort to be a leading player in the mid-merit energy market within the PJM power pool,” said Howard E. Cosgrove, Conectiv chairman and CEO. “The mid-Atlantic region needs additional electric capacity to support the dramatic growth the area is experiencing. We have undertaken a plan that, longer term, will allow us to add up to 4,000 MW of new mid-merit units. We’re making good progress in developing several potential sites. We will use our established power-trading group to maximize the value of that growing portfolio of flexible and efficient mid-merit power plants as they come on line.”