Merchant Mania: Regional Markets Draw Gen Plant Projects

Fortnightly Magazine - January 1 2000
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Developers launch 70,000 MW of new capacity in Texas, PJM and New York state, but how much will get built?

It's so hot down here, it isn't funny," laughed Ken Donohoo, senior transmission systems engineer at the Electric Reliability Council of Texas independent system operator. But no, he wasn't talking about last summer's scorching temperatures.

Instead, Donohoo was referring to some 30,000-plus megawatts of generation capacity proposed to be built in ERCOT between 2001 and 2003. And the projects reportedly planned for the Pennsylvania-New Jersey-Maryland (PJM) region would add another 30,000 MW, doubling the Texas total. Moreover, the two areas bear evidence of a growing trend: Standardization of power markets and transmission access across a region, through formation of an independent system operator (ISO) and (in some cases) a spot market power exchange, proves a strong drawing card for new investment in generation.

For reasons of confidentiality, Donohoo cannot reveal the names of the ERCOT project sponsors or the exact location of construction sites. Nor will PJM offer many details of plants proposed in its area, beyond the name of the substation that would link the plant to the grid. Yet at least 13 Texas projects have "gone public." These projects now list sponsors, size, location and planned completion dates, affording at least a modicum of confidence that some planned projects may in fact get built.

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