Power Notes

Compiled by OGJ Online Staff

Feb. 27, 2001à‚–Kinder Morgan Energy Partners LP (KMP) reported it has begun an offer to exchange its 7.5% Exchange Senior Notes due 2010 for any and all of its outstanding 7.5% Senior Notes due 2010. The original notes were issued Nov. 8, 2000. At the time of the issuance of the original notes, KMP agreed to offer to exchange the original notes for registered notes. The exchange offer will satisfy those requirements.

Cielo Wind Power LLC and Southwestern Public Service Co., a unit of Xcel Energy Inc., reported they reached an agreement to build an 80 MW wind power facility near White Deer, Tex., about 40 miles east of Amarillo. Cielo Wind Power is the project developer and owner of the site. Cielo will take 6 months to build the 80-turbine site. Electricity will be sold to Xcel Energy under a 15-year contract. Construction on the Llano Estacado wind ranch is scheduled to begin in July.

PECO Energy Co. said it will raise gas rates 23 cents/hundred cu ft (ccf) effective Mar. 1. For residential heating customers, PECO said its rate would rise to $1.14/ccf. The Philadelphia-based company said it must charge more to close a $128 million shortfall in its recovery of purchased gas costs. The new rate could remain in effect through November. Company officials said wholesale prices have begun to decline on the futures market, but summer prices appear to be about twice what PECO would have anticipated in past years.

Aquila Inc., a unit of UtiliCorp United Inc., said it agreed to buy 10 more turbines from General Electric Co. Combined with other orders, in the past 12 months Aquila has ordered a total of 21 turbines. The newly ordered units, each capable of producing 85 MW, are expected to be used in simple cycle peaking facilities. Aquila intends to site many of the turbines in the Midwest. Aquila recently placed orders for 11 turbines from General Electric and Siemens Westinghouse Power Corp. Eight of these units are already slated for summer 2002 peaking facilities the company is developing in Clay County, Ill., and Coahoma County, Miss. All of them will support commercial operations by the summer of 2003.

Constellation Energy Group Inc. said Kiewit Industrial Co., Omaha, Neb., will begin construction in early April of the 750 MW High Desert power plant at the Southern California Logistics Airport, formerly George Air Force Base. Commercial operation is scheduled for June 2003.

Avista Corp. and the Spokane County Air Pollution Control Authority (SCAPCA) reported reaching an agreement to extend the operating hours of Avista’s 60 MW Northeast combustion turbine power plant in Spokane, Wash. The 90-day extended operating period began Feb. 21. The plant, which is a reserve unit, has an operating license that limits its use to a specified number of hours during times of peak power demand. Extended operation of the plant was approved after SCAPCA determined, through air emission modeling and projections, that extended operation of the turbine would not adversely impact air quality.

In a settlement proceeding held by the Federal Energy Regulatory Commission (FERC), representatives of the Alliance RTO reached an agreement in principal with the Midwest ISO that calls for continuation of the two regional transmission organizations (RTOs) while establishing a single pricing structure and an inter-RTO coordination agreement that will help facilitate seamless bulk power transactions in the Midwest. The settlement, once certified by FERC, also allows Illinois Power Co., Commonwealth Edison Co., and Ameren Corp. to join the Alliance RTO, bringing total membership in that organization to nine companies. The final settlement agreement will be filed with FERC Mar. 19.

Salt Plains Storage Inc., an indirect wholly owned subsidiary of Alberta Energy Company Ltd., said it reached an agreement with Manchester Gas Storage Inc., and its affiliate MGL Inc., to purchase the 15 bcf Manchester gas storage facility for $42 million (U.S.). The Manchester facility, 110 km of Oklahoma City, will be renamed the Salt Plains gas storage facility. The purchase and sale was approved earlier this month by the U.S. Federal Bankruptcy Court for Northern Oklahoma. The transaction closed Feb.26.

Black Hills Corp. said it has begun the permitting process to build the previously announced 500 MW coal-fired electric generating facility adjoining its other power plants near Gillette, Wyo. Rapid City, SD-based Black Hills said in a statement the new coal power plant could be operational by mid-2005 but is contingent upon expedited regulatory approval, the availability of adequate electric transmission access, and the securing of long-term power contracts.

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