The New York State Public Service Commission has approved the construction of a 1,040 MW gas-fired power plant.

NRG Astoria, a subsidiary of NRG Energy, Inc., plans to build the $1.4 billion combined-cycle plant to replace an older 600 MW facility.

NRG Astoria intends to develop, finance, construct and operate the project as a merchant developer without relying upon cost-of-service rates set by either a federal or state regulatory entity.

The power plant will be built in two phases. The first phase involves the replacement of seven simple-cycle peaking generators that have a combined rated capacity of 120 MW, with two combined-cycle units capable of providing a total of 520 MW of electricity. The second phase involves the replacement of 24 simple-cycle units that have a combined capacity of 480 MW, with two combined-cycle units identical to those involved in the first phase.

Construction is expected to last 30 months for both phases, with phase one being completed in 2013 and the second phase in 2015.

NRG expects to finance each phase separately through a combination of debt and equity.

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