New coal capacity slated for USA and Canada

Over 1700 MW of new coal-fired capacity could be developed in North America over the next five years following announcements by Bechtel, TransAlta and Babcock & Wilcox. The plans signal a move away from gas-fired generation following high natural gas prices on the continent in the past year.

Babcock & Wilcox has received a $100m contract from Black Hills Corp. for the construction of Wygen I, an 80 MW coal-fired plant in Gilette, Wyo. Bechtel Power and UniSource Energy also announced an agreement to finalize plans for the development of two 380 MW coal-fired units in Arizona.

TransAlta announced in February that it is to expand by 900 MW its coal fired Keephills power plant near Edmonton, Alberta. The two 450 MW units will be commissioned in 2005.

“The construction of Wygen Unit I highlights the critical role of coal as a fuel in the US electric power expansion programs, especially recognizing the high cost and uncertainty of natural gas,’ said James F. Wood, president of Babcock & Wilcox.

California makes plans to rescue utilities

California Governor Gray Davis has signed a law allowing the state to sell $10bn worth of bonds to buy power at low rates under long-term contracts. The plan should help to rescue California’s three investor-owned utilities, which have been pushed nearly $13bn into the red by the on-going power crisis in the state.

Another proposal under negotiation is for the state to sell bonds to pay for the purchase of 41 800 km of transmission lines from the three utilities. Southern California Edison, Pacific Gas & Electric and San Diego Gas and Electric have been unable to pass on high wholesale power costs to consumers, leaving them close to bankruptcy.

The state has implemented emergency rate hikes, which are expected to be made permanent, to ease the utilities’ financial crisis. Gov. Davis is keen to avoid further rate hikes but is unlikely to be able to avoid further increases. Both the Bush administration and FERC have said that capping prices will discourage energy conservation and will do more harm than good.

Alliant leverages Brazilian position with acquisition

US-based Alliant Energy Resources has acquired a power distribution utility in Brazil and announced plans to construct generation capacity in the country. The moves are part of Alliant’s investment plans following its acquisition of a stake in a Brazilian utility holding company in January 2000.

Alliant has bought a stake in Sociedade Anonima de Eletrificacao da Paraiba (Saelpa), an electric utility serving over 726 000 customers, for $110m. The company will also construct two power plants: the 90 MW Termo Segipe cogeneration project and the 102 MW Juiz de Fora combined cycle power plant.

In January 2000, Alliant entered the Brazilian market through a partnership with Companhia Forca E Luz Cataguazes-Leopoldina (Cataguazes), a holding company with stakes in Saelpa and three other Brazilian utility companies.

Saelpa had sales of over 2000 GWh in 2000. Under the purchase, Alliant has acquired Saelpa’s customers at a record low price of $491 per customer. Other acquisitions in Brazil have averaged $1637 per customer, according to Alliant.

Heritage approved

Sithe Energies Inc. has been given approval by New York state for its 800 MW Heritage power station, which will be the first in the US to feature GE Power Systems’ new ‘H System’ technology. Construction is expected to start in spring 2001.

The New York State Board on Electric Generation Siting and the Environment granted Sithe its Certificate of Environmental Compatibility for the plant in late January. Heritage will be located next to Sithe’s existing Independence plant in Scriba, NY.

Heritage will enter commercial operation in 2004. It represents the next step in the commercialization of GE’s H System gas turbine technology, developed under the Department of Energy’s Advanced Turbine Systems programme.

Renewed interest

The Brazilian government is expecting eight energy companies to bid for a controlling interest in power company Cesp following a failed attempt to privatize the generator in December 2000.

Expected bidders for Cesp include Duke Energy, AES and Southern Company of the USA, Electricit√© de France, Electricidade de Portugal, Spain’s Endesa, Tractebel and Brazilian company VCB.

Cesp is one of the largest generators in Sao Paulo state with 7000 MW of capacity.