UPDATE 1-TransCanada, Arizona utility sign power-supply deal

(Adds details. In U.S. dollars)

TORONTO, May 12 (Reuters) - TransCanada Corp (TRP.TO: Quote, Profile, Research, Stock Buzz) jumped into the high-growth U.S. west on Monday, signing a 20-year deal with Phoenix-based utility Salt River Project, which will buy all the output from TransCanada's planned Coolidge Generating Station there.

Canada's biggest pipeline and electricity plant operator said Coolidge -- a $500-million simple-cycle natural gas-fired peaking power facility -- will be online by May 2011, and will have a nominal capacity of 575 megawatts.

The power plant's startup will be in time for peak summer power demand, the company said.

"The western U.S. and specifically Arizona represents an attractive growth market in North America for additional power generation and transmission projects," TransCanada CEO Hal Kvisle said in a release.

Phoenix-based Salt River Project has the right to extend the contract for an extra 10 years.

Construction on the power plant, located 45 miles (72 km) south of Phoenix, is expected to begin late next year. It will receive natural gas from the El Paso Natural Gas and Transwestern pipelines. ($1=$1.00 Canadian) (Reporting by Jonathan Spicer; Editing by Bernadette Baum)