Duke to Sell Terre Haute IGCC Power Station
insideindianabusiness.com
Press Release
PLAINFIELD, Ind. Duke Energy Indiana has agreed to sell one unit of its Wabash River Power Station (Unit 1) in West Terre Haute, Ind., to the Wabash Valley Power Association (WVPA).
The price of the transaction is based on the book value of Wabash River Unit 1 at the time of closing, which is currently estimated to be approximately $110-120 million.
Unit 1 produces electricity using synthesis gas from a coal gasification plant co-owned by WVPA and SG Solutions. It is adjacent to Duke Energy's Wabash River Station. When the synthesis gas is unavailable, the unit can also run on natural gas.
The sale includes Unit 1's 192-megawatt gas turbine, 100-megawatt steam turbine and the unit's associated equipment and property at the power plant site.
The remaining Duke Energy Wabash River Station units, which have the capacity to generate 668 megawatts, will not be affected by the sale.
"Wabash Valley Power Association has enjoyed a long history of partnerships with Duke Energy Indiana, including the joint ownership of substantial assets," said Wabash Valley Chief Executive Officer Rick Coons. "We see the acquisition of Wabash River Unit 1 as a continued growth of that relationship, while also satisfying the growing energy needs of our membership."
Duke Energy Indiana employees will continue to operate and maintain Unit 1 under a contract with WVPA. The sale is economically neutral to Duke Energy Indiana and its customers due to other capacity additions the company is making.
"The Wabash River Coal Gasification Repowering Project has been a success, but one thing we've learned is that the ownership of the gasifier and the power unit need to go together," said Duke Energy Indiana President Jim Stanley. "Our unit and Wabash Valley Power Association's coal gasification plant are fully linked operationally, so it makes sense that these facilities are owned by the same company. WVPA has done an excellent job operating the coal gasification plant since it became the owner."
The sale must be approved by the Indiana Utility Regulatory Commission, the Federal Energy Regulatory Commission, the Federal Trade Commission and the Department of Justice. These approvals are anticipated by mid-2007.
The Wabash River Coal Gasification Repowering Project was one of the first demonstrations of using coal gasification to produce electricity. Duke Energy Indiana recently filed for Certificates of Public Convenience and Necessity with the Indiana Utility Regulatory Commission for a 630-megawatt Integrated Gasification Combined Cycle (IGCC) power plant in Edwardsport, Ind., that will use the similar coal gasification technology. A decision to move forward with constructing the IGCC plant could take place as early as mid-2007.
"We have learned a lot from our involvement since 1995 with the coal gasification plant adjacent to our Wabash River Station and we will put that experience to work for us and our customers if we build the Edwardsport IGCC plant," Stanley added.
[snip] |
