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Strategies & Market Trends : IPPs and Merchant Energy Co.s -- Ignore unavailable to you. Want to Upgrade?

To: Larry S. who wrote (2900)	10/13/2003 9:22:11 PM
From: Larry S.	Read Replies (1) \| Respond to of 3358

Reliant Retires Two Units At Its Etiwanda Power Plant In Southern California DOW JONES NEWSWIRES LOS ANGELES -- Reliant Resources Inc (RRI) has retired two units totalling 264 megawatts of its Etiwanda power plant near Los Angeles, because required environmental upgrades don't make economic sense under current and projected market conditions, the company said in a press release Monday. The units, located in Rancho Cucamonga about 40 miles east of Los Angeles, haven't operated since Dec. 31, 2002. Reliant solicited proposals to supply power from the units at a cost that would cover the upgrades, but received no bids, the release said. "Had bids been received at the minimum bid levels, our intention was to move forward with the upgrades," said Dan Hannon, Reliant West Region president. Reliant may retire or mothball additional power plant units in the future, the release said, but didn't name which units. The two Etiwanda units represent about 7% of Reliant's generation capacity in California. They aren't part of the 824 megawatts of capacity that the company agreed to offer at auction as part of an October settlement of market manipulation charges with the Federal Energy Regulatory Commission, Reliant said. The company didn't admit wrongdoing in that settlement. After the retirement of Etiwanda Units 1 and 2, Reliant will have about 3,536 megawatts of generation left in California, said company spokeswoman Sandy Fruhman. "We can't really wait for the market to improve. We have a deadline for completing environmental upgrades and we can't keep operating units where the expenditures aren't justified by current conditions," Fruhman said. Fruhman declined comment on other units that may be under consideration for retirement. The retirement of the Etiwanda units shouldn't create a problem in terms of meeting demand in California, said Gregg Fishman, spokesman for the state Independent System Operator but it does point out a trend that bears watching. "There is a continuing trend where we are seeing older units shut down because they are no longer economic," Fishman said. "It's another indicator that we need to build new plants and/or transmission."