Purchase of 3 Plants Will Provide Plenty of Power for Summer, Says AmerenUE
By Jeffrey Tomich, St. Louis Post-Dispatch
Dec. 30–AmerenUE says its agreement, announced earlier this month, to buy three power plants will provide more than enough generating capacity and reserve power for its 1.2 million Missouri customers next summer — even without the Taum Sauk Hydroelectric Plant.
The utility this week asked the Missouri Public Service Commission to speed approval of a financing plan for one of the plants, a natural-gas-fired plant near Vandalia, Mo. Ameren said it wants to ensure a “prudent level of reserves for the summer of 2006.”
Utilities are required to maintain not only enough generating capacity to meet peak demand, which normally occurs during summer, but also a sufficient reserve in case a power plant fails.
AmerenUE agreed Dec. 16 to pay about $290 million for the three natural-gas-fired power plants with a combined generating capacity of 1,490 megawatts, enough to power almost 1.5 million average U.S. homes. Two of the plants being acquired are owned by Aquila Inc. in Illinois; the other, in Vandalia, is owned by NRG Energy Inc.
The purchase, expected to close in the first half of 2006, will provide Ameren with more than adequate power reserves, said Craig Nelson, Ameren’s vice president for strategic initiatives.
The PSC staff agreed. “With the combination of these purchases, they will have plenty of capacity this summer,” said Lena Mantle, energy department manager for the PSC staff. “Even with Taum Sauk being out for now, they’re fine.”
AmerenUE in May added 548 megawatts of generating capacity by transferring two gas-fired power plants at Pinckneyville and Kinmundy from its unregulated AmerenEnergy Generating Co. The utility also added generating capacity at its Venice plant in Illinois and boosted output available at the Callaway nuclear power plant in mid-Missouri with equipment repairs this fall.
The utility also added a significant new customer in Noranda’s aluminum smelter but lost the 440-megawatt Taum Sauk hydro plant — at least temporarily — after a 600-foot section of the upper reservoir wall atop Proffit Mountain ruptured and released 1.3 billion gallons of water Dec. 14.
Ameren wants the PSC to approve its financing plan for the Audrain plant in Vandalia, about 90 miles northwest of St. Louis, by Feb. 17.
“Expediting this proceeding… will avoid harm that could occur if (AmerenUE) is unable to obtain the NRG Audrain facility to meet its summer 2006 capacity reserve margin requirements,” the utility said in a filing.
Ameren is asking the PSC for approval to lease the Audrain plant from the county to avoid paying about $2 million a year in property taxes. Instead, the utility would make payments totaling $350,000 a year to various taxing entities in lieu of taxes. Ameren said in the filing that it would buy the plant outright and pay the property taxes if the proposed method of financing the transaction isn’t approved.
Ameren said the purchases of plants from NRG and Aquila were unrelated to the breach at the Taum Sauk reservoir. In fact, the agreement to buy the Audrain plant was signed Dec. 8, the filing said.
Ameren hasn’t said whether it will rebuild the Taum Sauk plant, nor has the utility offered a timeline for making that decision.
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