Public Service Enterprise Group (NYSE:PEG) Chairman, President and CEO Ralph Izzo on July 31 called the purchase of a planned 755-MW combined-cycle natural gas power plant in Maryland is a “good fit” for New Jersey-based PSEG.
Subsidiary PSEG Power announced in June that it has agreed to buy the Keys combined-cycle natural gas plant in Maryland from Genesis Power LLC and an energy-focused private equity fund managed by Ares EIF Management LLC for an estimated cost of $825m-to-$875m.
Commercial operation of the new gas plant is expected in 2018. The project is in a good market for PSEG and well located for economic delivery of natural gas, Izzo said. The Maryland Public Service Commission has already certified the need for the project being developed in Prince Georges County, Md.
The power plant purchase also won’t use up all of the company’s “balance sheet capacity,” said PSEG Executive Vice President and CFO Caroline Dorsa.
Company officials also said during the call that the company recently completed incremental power increase at at the PSEG Kearny plant in New Jersey as well as the Peach Bottom 2 nuclear plant, in Pennsylvania. Peach Bottom is co-owned by PSEG and Exelon (NYSE:EXC).
PSEG Power generating output up by 10% vs. 2Q14. PSEG Power’s generation was 13,233 GWh for the recent quarter, compared to 12,050 GWh in 2Q14. During the just-completed quarter, nuclear power accounted for 7,129 GHh, followed by oil and natural gas at 4,831 GWh and coal at 1,273 GWh.
The nuclear fleet operated at a capacity factor of 86% or 5% better than a year ago. This reflects a major outage that had occurred last year at Salem 2, PSEG officials said.
The company’s natural gas fleet benefitted from low gas prices and healthy spark spreads during the quarter, PSEG said.
A recent final decision by PJM final decision assigns PSEG utility Public Service Electric and Gas (PSE&G) a portion of the Artificial Island transmission upgrade project The program will increase transmission spend by ~$100m-to-$130m over next four years. PSE&G also placed the full 500 kV Susquehanna-Roseland line into service in May
PSEG reported Operating earnings of 57 cents versus 49 cents per share in Q2 2014, up 16%.