Death of deregulation?

California’s electricity auction market, California Power Exchange, said on 9 March 2001 that it has filed for Chapter 11 bankruptcy protection. The Exchange, set up by the state’s discredited deregulation scheme, was expected to make this move after announcing that it was “unwinding its affairs”.

The state has already approved legislation that will allow it to buy or build power plants to meet the rise in electricity demand. The bill is awaiting approval from the Assembly. The 24-14 vote in favour of the legislation led one Republican Senator to claim that “deregulation in the state of California is officially dead.” The Independent Energy Producers Association said that the move might backfire if the state starts seizing plants, deterring private firms from building much needed new plants.

Governor Gray Davis has agreed on tentative plans with Southern Californian Edison to buy the cash-strapped utility’s power lines for an estimated $2.7bn. The deal requires the utility’s parent company to sell cheap power to the state for a decade.

Meanwhile, Sempra Energy Resources has announced plans to build a $350m, 600 MW power plant near Mexicali, Baja California, Mexico. The plant, Termoelectrica de Mexicali, will be connected to the US electricity grid via a new 230 kV transmission line.

Group president of Sempra Energy Donald E. Felsinger, said, “Electricity from this new power plant can help alleviate California’s crisis”.

Alstom wins clean coal power plant order

Alstom has won a major order to supply Reliant Energy Seward LLC with a 520 MW coal-fired power plant to be built at Seward in Indiana County, Pennsylvania. The total order is valued at around $550m of which Alstom’s share is around $235m.

Commercial operation of the new plant is planned for May 2004, when it is expected to more than double Seward’s current generating capacity.

Alstom’s circulating fluidized bed technology uses advanced in-furnace combustion control techniques to reduce emissions. When combined with the selective non-catalytic reduction system (SNCR) and flue gas desulphurization technologies as well as particulate control, it enables waste coals to be used for power generation with low emission levels.

Edison addresses market faults

Consolidated Edison Company of New York (Con Edison) has called on the Federal Energy Regulatory Commission (FERC) to correct flaws in the New York wholesale electric marketplace that allow power generators to exercise market power. The firm has called for the modifications as a measure to protect its 3m electric customers from price spikes in an uncompetitive wholesale electricity market.

President of Con Edison, Kevin Burke, argued that the original market power mitigation measures were established before the New York Independent System Operator (NYISO) became operational. With the evolution of the market for electricity in New York some loopholes have emerged.

He said that the filing was aimed at closing the loopholes and providing customers with greater protection against price hikes, which can be as high as $20m in some months when the marketplace is not competitive.

Measures called for in the filing include market rule changes that will target generators who “game” the NYSO’s real time market.

In addition, protections on bidding behavior, measures to discourage generators from withholding their power from the day-ahead market in order to artificially inflate prices, and an extension of existing market power mitigation measures to cover all inner-city generation sources owned by Edison have been requested.

New power

Mirant Corp. has announced plans to build an 894 MW natural gas-fueled power plant in Portage County, Wisconsin, pending final regulatory approvals.

President of Mirant Americas Richard J. Pershing, said, “The proposed Portage county plant would serve the central Wisconsin area and have access to regionally interconnected power pools in all or part of 12 Midwest states and central Canadian provinces.”

Two of the plant’s units are to be built in combined cycle configuration, totaling 586 MW of capacity. This portion of the plant is to meet the day-to-day electric needs of central Wisconsin. Four additional units totaling 308 MW are to be built in a peaking configuration for use in times of high demand.

Port gets petcoke

The Port of Port Arthur has announced plans to build one of the world’s largest petroleum coke gasification facilities and related electrical generation in Port Arthur. A partnership has been formed between the Port of Port Arthur and privately held Sabine Power I Ltd. to construct the project, valued at around $1.75bn.

A study by Comptrollers Office of Texas has estimated the proposed project will have a net regional effect of $1.9bn during the three year construction period.

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