FERC sets blueprint to improve grid reliability

The Federal Energy Regulatory Commission released a series of proposals designed to lower power prices and improve the power system in a bid to avoid potential repetitions of the California crisis.

The proposed rules face a 75-day public period before being finalized to take effect in September 2004. The rules will seek to improve reliability of the aging US power grid and discourage companies from exercising market power to control prices.

FERC wants to penalize utilities that fail to build or buy enough power plant capacity to serve their customers. That measure is aimed at answering a riddle that has so far befuddled architects of electricity restructuring – how to persuade private power plant owners to build the extra MW needed to prevent the grid from crashing, despite the fact that such reserve capacity can drive down prices.

Entergy acquires Vermont Yankee

Entergy Corp. purchased Vermont Yankee nuclear plant for $180m from Vermont Yankee Power Corp. after settling commercial terms of the deal.

The public service board of Vermont tried to change the terms of the deal, but Entergy said it was unwilling to close the transaction unless original commercial terms were restored.

The original memo stipulated that if the plant was decommissioned prior to 2022, Entergy would retain any excess funds.

NY-NJ to construct 1200 MW power link

TXU Corp, a unit of TXU Energy, will stump up $15m in development funds to Atlantic Energy Partners LLC, to help build a 1200 MW power transmission link between New Jersey and New York.

The project, dubbed the Neptune Regional Transmission System, will consist of two 600 MW links between New Jersey and New York, the first four phases in the proposed system. One of the links is proposed to connect the electric grid in NYC with Sayreville, NJ, while the second would connect the heart of Long Island to Sayreville, via high voltage direct current transmission lines at an estimated cost of $500m.

Construction is scheduled to begin during the second quarter of 2003, with the Neptune RTS facilities expected to be in service by 2005.

Panama to establish $13m interconnection project

Panama’s national power company, Empresa de Transmission Electrica (ETESA) has contracted ABB to supply three high-voltage substations that will reinforce the grid connection with the Esti hydroelectric plant, to be built in the west of the country and Panama City.

The three 230 kV substations will form part of a 429 km transmission system, which is being constructed in parallel to an existing power transmission system to provide vital grid reinforcement for when the Esti power project is completed in November 2003. Esti is being expanded by 50 MW.

Celmec, a local civil construction and erection company, will be carrying out the contract with ABB. The two companies previously worked together in 2000 when delivering substations to ETESA on a separate project.

Dynegy sells to stay afloat

MidAmerican Energy Holdings Company has reached an agreement with Dynegy to acquire the Northern Natural Gas Company for $928m and the debt assumption of $950m.

Dynegy need to sell to pay off a $300m debt mountain that has to be settled by November. The sale of the pipeline is part of a $1bn capital programme to raise enough cash for Dynegy to continue trading.

Mexico details energy plans with long term revamp

Mexico’s President, Vicente Fox, outlined major plans to reform the country’s constitution to make way for more private participation in the power sector.

The laws that Fox plans to reform are articles 27 and 28. The move may prove unpopular with oppositional parties that prefer to keep state-owned assets under government control. Energy Minister Ernesto Martens said three power plants, to be constructed in Northern Mexico, will increase the generation capacity by seven per cent. He said next year’s budget is expected to include three cogeneration projects that will boost capacity by 1400 MW. Two of the plants will be developed by Spain’s Iberdrola and the other by France’s Alstom. Fox’s government expects to build 11 power plants by 2006.

The government estimates the country will need 60 000 MW by 2010, which will need investment of $5bn a year.

News digest

Brazil: Eletrosul, the Electric Energy Transmission Company for the South of Brazil, has chosen Kema Consulting Brazil to review the technical specifications of the new supervisory control system of the transmission operation center (COT). The COT is responsible for the real-time coordination, supervision of all operations in 32 substations.

Canada: An Ontario coal-fired generating station is Canada’s worst single source of air pollution, spewing more chemicals into the air than four provinces combined. The Nanticoke plant alone is responsible for six per cent of all air pollution in Canada.

USA: Peabody Energy announced it had signed a letter of intent with an electricity generator for 16 years of coal supplies to fuel new generating units to be built in Arizona. The agreement calls for Peabody to supply up to 89m t of coal through 2020 for new generating capacity to serve the growing energy needs of the Southwest.

USA: Black & Veatch announced it has been selected by the Iowa Department of Natural Resources to formulate a series of four case studies based on photovoltaic modules and the feasibility of their application in the midwestern part of the US.

USA: Shell Renewables acquired the project development company Whitewater Hill Wind partners. The company’s US wind energy operations, Shell WindEnergy has signed an agreement with CPC Development Corporation, an affiliate of Cannon Power Corporation, to acquire its project company developing the 61.5 MW Whitewater Hill wind park in the San Gorgonio. The acquisition will bring Shell WindEnergy’s capacity in the US to 230 MW.

USA: Developers and government agencies are proposing 11 wind power projects across New England, from the mountains of Maine to the Boston Harbor Island, including some that would be among the biggest wind farms in the world.

USA: The organization that operates the wholesale power market in the Mid-Atlantic US said it will release the results of an investigation it launched to determine whether discrepancies between scheduled power shipments and actual electricity flows resulted from deliberate attempts to manipulate the market.

USA: Tenaska, an energy company in Omaha, said that its affiliate, Kiowa Power Partners, has executed the necessary contracts for construction to begin on an 85 mile 345 kV electric transmission line from Pittsburg County, Oklahoma, to Fannin County, Texas.