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OKLAHOMA SPOTLIGHT
Site Synergies
The existing Hugo plant employs about 85 people, and some of the new hires at Hugo 2 will work at both facilities. Economy of scale is a big factor behind locating the new plant next to its sister facility. "That's one of the key drivers for locating the plant at that site selection," says Hobbs. "There is significant infrastructure already in place that will be used by the second unit, and staffing is one of those." The Hugo site was designed in the early 1980s with room for expansion, such as Hugo 2. Nevertheless, "we looked at a lot of [site] alternatives in how to meet growing energy demands in a cost- effective way," says Hobbs. "We are not for profit; we provide power and energy to our members at cost for distribution to their local members. It quickly became apparent that a coal- fired facility would be the most cost- effective, because coal pricing is much less volatile." Adding scale at the Hugo 1 facility results in a 30- percent efficiency gain, which lowers production costs. "We get the advantage of that without having to make significantly more capital investment, because Brazos will be making that investment," says Hobbs. "That's helpful to both parties."
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