NRG Energy to add 75-MW plant in Texas, plans more additions

Wed Aug 8, 2012 1:43pm EDT

* 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.
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