HOUSTON Oct 3 Texas environmental regulators
issued an air permit for a new quick-start, natural gas-fired
power plant, the first to be permitted as the state's electric
supply struggles to keep pace with a growing economy.
The Texas Commission on Environmental Quality issued an air
permit on Wednesday to Guadalupe Power Partners LP for a
470-megawatt, "peaking" power plant to be built outside San
Antonio in Guadalupe County.
The simple-cycle gas units are planned at an existing
1,070-MW, combined-cycle gas plant which has been operating
The new generation could be online in mid-2015. The project
is also working to obtain a greenhouse gas permit from the
Environmental Protection Agency.
The so-called peaking plant - which can start-up quickly but
operates only when needed to meet rising power demand - is one
of about 10 similar generation projects totaling 4,200 MW under
development in Texas'primary grid, overseen by the Electric
Reliability Council of Texas (ERCOT).
Other companies have obtained or are seeking permits to
build another 8,200 MW of combined-cycle generation in ERCOT,
according to Reuters data.
While the proposed plants could potentially add more than
12,000 MW of new supply, it is unclear how many will ever
advance to construction due to low wholesale prices that make it
difficult for developers to obtain financing.
For the past two years, the Texas Public Utility Commission
(PUC) and ERCOT have taken steps to improve wholesale price
signals, but developers and others say more changes are needed.
The PUC is looking at several options to increase wholesale
prices to attract new generation.
Currently, Panda Power Funds, Calpine Corp and the
Lower Colorado River Authority are constructing 2,800 MW of
additional gas-fired generation in ERCOT, but most developers
are waiting for the PUC to act before committing to build new
Guadalupe Power Partners is owned by Minnesota-based Wayzata
Investment Partners and managed by Navasota Energy, a private
Houston-based company which built, operated and sold two 550-MW
gas plants in Texas. A third Navasota Energy project obtained
permits but was never built.
An affiliate of Wayzata Investments entered the Texas power
market in 2011 when it purchased the existing Guadalupe
gas-fired plant from PSEG Power.
Guadalupe Power Partners declined to comment on the permit
The project has completed studies necessary to connect to
existing transmission infrastructure.
According to the state permit, the Guadalupe project will
utilize one of four combustion turbine models made by General
Electric or Siemens.