Texas commission reviews El Paso Electric plans for gas units

El Paso Electric (NYSE: EE) plans to build 176 MW of new peaking capacity are making headway before the Texas Public Utility Commission.

On Sept. 28 the commission issued a preliminary order outlining issues to be addressed in its review of a company application to amend its certificate of convenience and necessity (CCN) for two 88-MW natural gas-fired units (Montana 1 and 2) at the Montana site in El Paso County.

There is currently no generation at this site, the commission noted. “The new facilities are needed to accommodate growth in demand and replace older, less efficient generation capacity,” it added. “The units are to serve as peaking and intermediate facilities and are scheduled to be in service for the peak seasons of 2014 and 2015, respectively.”

The new facilities were picked in a competitive bid process and will be based on the same technology as the Rio Grande Unit 9 currently under construction, the commission wrote. The direct capital cost of the project, including associated transmission facilities and common costs, is an estimated $182.4m. In addition, the estimated amount of allowance for funds used during construction is $20.6m.

“Although not part of this application, it will be necessary to construct approximately 3.2 miles of transmission line to connect the plants to the Caliente substation and to tap into and re-conductor an existing transmission line from the Caliente substation to the Coyote substation,” the Texas commission noted.

On Sept. 6, the commission issued an order of referral to the State Office of Administrative Hearings (SOAH) and a preliminary order including issues to be addressed and not addressed. On Sept. 14, the commission issued an order rescinding the preliminary order portion and requiring and requesting submissions of lists of issues by Sept. 20. On that date, commission staff and El Paso Electric filed lists of issues to be addressed in this docket.

The commission must provide to the administrative law judge a list of issues or areas to be addressed in any proceeding referred to SOAH. After reviewing the pleadings submitted by the parties, the commission identified the issues that must be addressed in this docket, including the adequacy of existing service, the need for additional service and the effect of granting the CCN on the applicant and any electric utility serving the proximate area.

El Paso Electric (EPE) said on its website that the Montana plant, once the necessary government approvals are obtained, is due to go into construction during the 2013-14 period, with the first unit scheduled for operation in 2014.

“Using the cleanest fossil fuel available and the latest commercially viable technology, EPE proposes to construct two generators (simple-cycle aero-derivative combustion turbines with peaking capability),” the Montana project website said. “Given the elevation and conditions, the generators will provide 176 MWnet of peaking capacity (88 MWnet each) at summer peak which will be delivered directly to the EPE transmission system. This energy will be capable of powering 80,000 homes. The site and permits are being designed to allow for two additional generating units in the future, if needed.”

The website said that Rio Grande Unit 9, a $75m simple-cycle aeroderivative gas turbine project, is expected to generate 88 MW to 95 MW and to be completed by May 2013.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.