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Gas-Fired Generation

Fortnightly Magazine - September 15 1995

gas generation and the cost advantage that natural gas enjoys. Therefore, with or without regulatory change at the state or federal level, natural gas will maintain its advantage over other fuels and technologies.

Natural gas pipelines should enter the competitive electrical generation field only if they truly comprehend the risks and rewards. The days of building a facility and force-selling to the franchised electric utility are clearly in the past. Generation will resemble the wellhead end of the natural gas industry (em very competitive with low thresholds to entry, as compared to the electrical delivery system.

Charles E. Zeigler, Jr.

Chairman, President, & CEO

Public Service Co. of North Carolina

The outlook for gas-fired power generation in our market territory is very positive in the mid to long term (four to 15 years), assuming that current market growth projections are realized. While legislative and FERC actions will significantly affect power generation opportunities, we believe this opportunity is more dependent on market growth and the natural gas industry's ability to compete with alternative fuel sources. In the long term, successful power producers will pursue those options that serve their market requirements at the lowest reasonable cost. If natural gas or any other fuel can accomplish this more effectively than coal, then any existing bias for coal will be overcome. Environmental concerns will also be a deciding factor that should favor natural gas.

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Corbin A. McNeill, Jr.

President & CEO

PECO Energy Co.

The Northeast will have a capacity glut for at least the next five years. New electric generating capacity will be limited. At PECO Energy, three oil units were converted for operating flexibility with natural gas. We believe other utilities will choose to convert to dual fuel as well. Neither industry deregulation nor the repeal of PURPA is an issue for gas-fired electric generation. Some small cogenerating units will continue to be developed. The increase in generation using natural gas may slow in the next decade due to gas price increases and coal price decreases. After that, distributed generation, which could include fuel cells, will be a gas resource. PECO Energy believes natural gas pipelines should remain autonomous. t

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