Skip to main content

Features

UTILITIES SNAPSHOT

tilities don’t just help lure other companies’ facility
investments. They create their own, either directly or via spinoff effects.
And the project portfolio goes well beyond power plants.

      In Atlanta, multi-utility holding company Southern
Company will be moving into a new corporate headquarters in 2005. Developed
by Barry Real Estate Companies, the mid-rise, 260,000-sq.-ft. (24,154-sq.-m.)
complex will devote half that space to Southern Co.’s 400 employees.
The company,

Build It …

and Things Will Hum


      A study released in early 2004 by ICF
Consulting forecast huge savings in wholesale power costs
if a 26-year, $8-billion transmission infrastructure improvement
plan were implemented. In current U.S. dollars, the wholesale
cost would drop by $12.5 billion, said the report, and the
savings total could reach $64 billion when factoring in
reduced outages.

      Among the signs that such investment
is needed: power deals not fulfilled because of transmission
constraints increased by a factor of five between 1998 and
2002, to some 1,500 instances, according to the North American
Electric Reliability Council. A U.S. Dept. of Energy grid
study from 2002 said that several major power corridors
run at full capacity more than 80 percent of the time.

      Power plant construction itself is
on the upswing, despite a capacity glut that has seen several
utilities mothballing plants. In May 2004, McGraw-Hill Construction
Dodge reported that power plant projects (along with manufacturing
projects) were prime movers in boosting first-quarter 2004
construction starts seven percent ahead of 2003’s pace.
There are at least 100 new coal-fired plants alone on the
drawing boards in the U.S. And there is also renewed interest
in nuclear plant development, with studies under way by
Exelon, Entergy, TVA and the Province of Ontario.

which has signed a 12-year lease on the new digs, will also achieve
the savings generated by a 20-percent reduction in square footage.

      In Raleigh, N.C., Progress Energy has invested
$7 million in a $100-million, 19-story office, condo and retail building
due to be completed by fall 2004. Plans call for 1,200 Progress employees
to occupy 11 floors. Owned by J. P. Morgan Trust Co., it will be leased
back to Progress as part of a 30-year agreement. This move also will
reduce occupied space by about 20 percent as the company consolidates
three separate Raleigh locations.

      Sometimes the utility’s own property is the literal
ground for the project. In Bellevue, Neb., just south of Omaha, Nebraska
Public Power District’s dormant Kramer Power Plant is on its way to
helping double the size of neighboring Hayworth Park.

      When the plant was retired in 1987, NPPD first
looked for a buyer, says NPPD spokesperson Beth Boesch. When that didn’t
materialize, the plant was put in a shutdown state that still allowed
for a potential return to service. “It was our highest-cost generating
facility and we didn’t need the capacity,” says Boesch.

      In 2003, the decision was made to demolish the
plant, and an agreement was reached with the City of Bellevue whereby
the City would reimburse NPPD for the total contract cost to dismantle
the plant, as well as NPPD’s costs for providing project management
services. At the completion of the project, NPPD will deed the land
to the City. In June 2004, the complex’s main plant was gently brought
to the ground, opening up 101 acres (41 hectares) of beautiful riverfront.


      “Kramer Station operated for more than 40 years
producing power that enhanced the quality of life for Nebraskans,” said
Rick Gardner, NPPD vice president of energy supply, when the plant’s
smokestacks were felled on Christmas Eve 2003. “It is good to know that
the location will enhance the quality of life for Bellevue residents
as a future park.”

Plants and Terminals

On the Rise

      Power plant construction itself is definitely on
the upswing, despite a capacity glut that has seen several utilities

 Downtown Raleigh, N.C., boasts a
new home, owned by J.P. Morgan Trust Co., for Progress Energy’s
1,200 employees.

mothballing plants. In May 2004, McGraw-Hill Construction Dodge reported
that power plant projects (along with manufacturing projects) were prime
movers in boosting first-quarter 2004 construction starts seven-percent
ahead of 2003?s pace. And there are at least 100 new coalfired plants
alone on the drawing boards in the U.S., spurred in part by the rise
in natural gas prices, and characterized by cleaner-burning gasification
technology.

      Looking southward, Gas Natural SDG SA officials
announced in June 2004 their intentions to invest some $350 million
in Puerto Rican electricity projects, part of a $1.57-billion Americas
expansion plan through 2008.

      Even nuclear energy, 25 years after Three Mile
Island, is getting a pep talk, with the U.S. Energy Dept. not only offering
new incentives for new plants, but looking at constructing its own plant
amid an aging national portfolio of 103 nuclear facilities. Leading
utilities like Exelon, Entergy and the Tennessee Valley Authority are
heading up study groups looking at licensing new plants. To the north,
driven in part by the province?s pledge to decommission some of its
coal-fired plants, new nuclear capacity has been a key part of plans
introduced by both the Ontario energy minister and an Ontario power
supply study committee.

LNG Dollars Not

Enough To Sway Some

      Typified by the vote-down of a $350- million
terminal in Maine that would have brought in $8 million in annual
tax revenues, liquefied natural gas (LNG) terminals are continuing
to experience a rocky reception. This comes despite Federal Reserve
Board Chairman Alan Greenspan?s call for increased LNG terminal capacity.
A safety study by the Federal Energy Regulatory Commission is expected
to be finished by 2005.

      A $250-million project proposed by Weaver?s Cove
Energy in Fall River, Mass., is also meeting stiff opposition. A terminal
project in Eureka, Calif., was suspended by Calpine Corp. after opposition
arose. After backing off an Alabama LNG terminal project, ExxonMobil
is moving forward with plans for two $600-million facilities in Texas;
so is Freeport LNG, led by ConocoPhillips. ExxonMobil is also considering
an offshore terminal south of Louisiana. But in May 2004, ChevronTexaco
beat them to the offshore punch, securing EPA approval for Port Pelican,
37 nautical miles (60 km.) south of Louisiana.

      Meanwhile, The Wall Street Journal reports that
three different terminal applications from Royal Dutch/Shell and Sempra
and from ChevronTexaco are in the works in Mexico, two in Baja California
and one in the Gulf city of Altamira. As in the U.S., plans can backfire:
a proposed $1.7-billion project in Baja California from Marathon Oil
pulled out after the state government expropriated some of the site?s
land. Site Selection

     

Case Study in Perseverance:

A Renewed Energy Backbone in the Southwest