BC splits up to attract investment

Canada’s British Columbia Hydro is to divide itself in two in a bid to attract investment to add power generation capacity and maintain low tariffs.

The split will mean that one side will head up the hydro dams, distribution operation and the other will focus on transmission lines. The plans also include the development of offshore oil and gas as well as the construction of coal fired generating plants. The Energy Minister Richard Neufield said consumers will be protected from price increases by heritage legislation keeping the rates low from the province’s network of hydroelectric dams.

The company has seen previous attempts to lure investors fail. Some independent power producers have claimed that BC Hydro is difficult to work with. However, the company is now positioning itself to be more investor friendly.

ICA Fluor Daniel to build 500 MW Mexico plant

ICA Fluor Daniel, the industrial engineering company jointly owned by Fluor Corporation and Empressa ICA Sociedad Controladora, announced its intention to construct a 498 MW, $250m, combined cycle power plant in Gomez Palacios, Durango, Mexico for Iberdrola Energia.

The plant, dubbed La Laguna II, is a combined cycle gas fired plant scheduled for completion in April 2005 and to supply northern Mexico. The project is the second that Iberdrola has commissioned from the ICA Fluor Daniel. The first project, which is still being constructed, is a 1036 MW facility on the Mexican Gulf Coast.

El Paso Electric is ordered to repay $14m

El Paso Electric has been ordered by the Federal Energy Regulatory Commission (FERC) to refund California $14m and forfeit power trade privileges for two years for its dealings with Enron during the Californian power crisis.

El Paso Electric, along with other US companies, have been pulled up by FERC in a two-year on-going investigation. El Paso Electric continues to assert that it has not violated any statute in conducting its wholesale trading activities.

FERC believes that El Paso Electric, which is not related to pipeline company El Paso Corp., gave control of some of its power plants to Enron without FERC approval, allowing Enron to circumvent trading rules during the California crisis of 2000 and 2001, when wholesale electricity prices soared.

California is seeking $8.9bn in refunds from power companies which sold power into the state during the crisis.

Centrica buys retailer in Canada

Centrica plc will acquire the retail gas and electricity supply business of the ACTO Group in Alberta, Canada for C$128.5m ($52m).

Next year will see Centrica hold a customer base of 5.5m as it attempts to complete this transaction along with acquisition of 860 000 AEP customers in Texas. In Canada, the company will become a firm household name as it will be the biggest supplier of energy and services to small businesses and homes.

The ATCO transaction includes a ten year agreement, with a five year break clause, under which ATCO’s I-TEK subsidiary will carry out billing and customer care functions for Centrica’s Direct Energy unit.

Direct Energy will focus on the deregulated Alberta power market, offering dual fuel fixed price energy contracts, as well as a range of home services.

TVA places $200m order for extra-high voltage transformers

ABB has signed a five-year agreement with the USA’s Tennessee Valley Authority for $200m worth of extra-high voltage power transformers.

The transformers will have ratings of up to 765 kV. They will be purpose built and designed to operate with little maintenance for up to 40 years.

Due to the high capacities of extra-high voltage systems, the transformers have to withstand extreme stress in case of network disturbances. The transformers also have to secure correct voltage control independent of all possible load cases between the systems.

The transformers will be manufactured in Canada, Germany and Spain.

El Paso Corp. announces sale of Samalayuca II interest

El Paso Merchant Energy, a unit of El Paso Corporation, is to shed its 40 per cent interest in the 700 MW Samalayuca II power project in Mexico to an affiliate of GE Structured Finance.

The plant, situated near Ciudad Juarez, comprises three natural gas fired combined cycle units and sells power to the Comision Federal de Electricidad for distribution to the state of Chihuahua.

The aim of the sale is to scale down El Paso’s debt pile as well as reinforce its balance sheet. The sale, if completed, would bring El Paso’s divestment to over $3.7bn for the 2002 financial year.

News digest

Argentina: Argentina’s President Eduardo Duhalde has raised rates for gas and electricity by 2.5 pesos (70¢) per month for electricity and 1.4 pesos per month for gas. The government froze utility rates after devaluing the peso currency last year.

Canada: A decision on Canada’s role in the Kyoto protocol was decided when the House of Commons voted in favour of ratifying the deal. Kyoto requires Canadian businesses to reduce emissions by 55 megatonnes or 23 per cent of the country’s 240 megatonne target for reductions.

Chile: Chile’s power firm Endesa has described the long-term perspectives for Latin America as “bright” at the IV European Forum of Latin American Companies in Madrid. Endesa has operations in Argentina, Brazil, Colombia, Peru and Chile.

USA: Kawasaki Gas Turbines-Americas, a division of Kawasaki Motors Corp., announced the world’s first commercial operation of a new low emissions technology from Kawasaki and Cataytica Energy Systems. Kawasaki has initiated online operation of a retrofitted gas turbine cogeneration facility at the Sonoma Development Center in Eldridge, California. A 1.4 MW Kawasaki M1A-13D has been rebuilt to accommodate the new Xonon Cool Combustion from Cataytica.

USA: GE Power Systems will supply a steam turbine generator and additional equipment to Santee Cooper, South Carolina’s state-owned electric and water utility, for expansion of its coal fired Cross Generation Station. A GE G9D steam turbine generator rated at 652 MW will join two other GE steam turbines already installed at the Cross site.

USA: Siemens PG has announced that the number of its advanced W501G gas turbine units in operation is set to double in 2003. Currently there are nine W501G units in operation with an accumulated operating hours total of over 50 000 hours. The lead unit has surpassed the 10 000-hour milestone.

USA: Colorado Interstate Gas, a subsidiary of ElPaso Corp., has announced the development of a new natural gas pipeline project that extends from Wyoming to Kansas. The Cheyenne Plains Pipeline will serve markets in the midwest with connections to mid-continent pipelines near Greensburg, Kansas.

Venezuela: The Andean Development Corp. (CAF), the regional financing arm of South America’s Andean nations, said it has authorized $100m in financing for a Venezuelan hydroelectricity project.