NRG Energy to add 75-MW plant in Texas, plans more additions
* Texas faces electricity shortage as demand grows * Regulators working to encourage power-plant construction * NRG to seek second permit for larger gas-fired plant HOUSTON, Aug 8 (Reuters) - NRG Energy, the second-largest power generator in Texas, has accelerated construction of a small natural gas-fired power plant near Houston to help the state avert a looming power shortage next summer, officials said on Wednesday. NRG will add a 75-megawatt, combustion turbine at its W.A. Parish coal-fired plant near Houston to be online next summer. The "peaker" unit will be able to start in minutes to meet high demand. "The new unit will bring additional power to the grid very quickly, cleanly and efficiently," said John Ragan, president of NRG's Gulf Coast operations. NRG also holds a permit to build a large combined-cycle gas unit at its Bertron power plant east of Houston and plans to seek a permit in the coming months to build another large gas plant at another existing plant site, officials said. Generation owners and developers have warned that time was growing short to install new generation by 2014, when the Texas grid operator has said power reserves will drop into single-digits, increasing the likelihood of rolling outages. NRG brought 1,100 MW of generation out of mothball status this summer to provide additional supply, but officials have said more changes are needed to boost wholesale prices in Texas to commit to building new plants. NRG said the new 75-MW turbine will be used to supply power to the grid for at least two years. In 2015, the unit will be used to support operation of a post-combustion carbon capture system under development at the existing Parish coal plant which is part of Energy Department's Clean Coal Power Initiative. Ragan said accelerating construction of the new turbine will help the state over the next two summers but is "ahead of the economic price signals that would allow us to build new generation on its own." NRG "wants to be ready to start construction on a new unit as soon as the economic conditions allow," Ragan said in a statement. "While we cannot build these large units today, the continued increase in demand in the state over the last few years coupled with the efforts of the Public Utility Commission of Texas (PUCT) has helped to move us closer to being able to break ground on additional units in the future," Ragan said. On a call with analysts Wednesday, NRG's Chief Operating Officer Mauricio Gutierrez, said Texas market reforms are "a good first step" to provide economic signals to support new construction. But "more structural improvements to the competitive market are required to achieve ERCOT reliability targets," Gutierrez said. Last month, Panda Power Funds of Dallas said it would build a 758-MW combined cycle gas plant in Bell County to begin operating in 2014.