Allegheny unit plans $400 million power plant in Ind.

Hagerstown utility to complete it in '05

January 06, 2001|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

In yet another step toward becoming a major national energy supplier, Allegheny Energy Inc. announced yesterday that its unregulated subsidiary will build a $400 million, natural gas-fired power plant near South Bend, Ind.

Construction on the 630-megawatt plant, which will give the Hagerstown power company nearly 13,000 megawatts in generating capacity, will begin in 2002 and is expected to be completed by early 2005.

Allegheny also has launched a billion-dollar program to build plants in Arizona and Pennsylvania. And the company has announced plans to purchase three power plants in the Midwest.

"I would view this development favorably in that the company is continuing to pursue a policy of adding additional generating capacity," said David Burks, a utilities analyst at J. J. B. Hilliard, W. L. Lyons Inc. in Louisville, Ky. "As a result of this and other similar activities, the company should be well-positioned to meet the energy needs of its customers.

"Companies that are net generators of power are in a better position to compete in an increasingly deregulated utility market environment."

Construction on the combustion turbine power plant in New Carlisle, Ind., will begin in 2002 and is expected to be completed in two stages. Two 44-megawatt turbines will be finished by the end of 2002 and a 542-megawatt turbine will be completed in 2005.

The facility will allow Allegheny Energy Supply Co. LLC, the company's unregulated subsidiary, to sell additional power into the East Central Area Reliability Region, which is made up of power companies in parts of eight states, including Indiana and Maryland. Allegheny's new Indiana plant also will give the company greater access to other markets.

"This facility will add to our Midwest generating capacity and further demonstrates our significant progress toward the goal of becoming a national energy supplier," said Alan J. Noia, chairman, president and chief executive of Allegheny Energy, the parent company. "This fits with our long-term corporate strategy and will be a positive benefit for our company and our shareholders.

"This facility will allow Allegheny Energy Supply to provide peaking generation in times of high electrical demand initially and will then be expanded to include base-load generation to help meet the growing demands for electricity in the region," Noia said.

Allegheny also has announced plans to build a 1,080-megawatt natural gas-fired power plant in La Paz County, Ariz., and a 540-megawatt power plant in Springdale, Pa.

Five 44-megawatt turbines that Allegheny built have already gone into service throughout Pennsylvania, and two more units are to be constructed in the state. Allegheny Energy serves parts of Pennsylvania, Maryland and three other states.

Allegheny announced in November the acquisition of three Enron power plants with 1,710 megawatts of natural gas-fired capacity. The sale price was not disclosed for those three facilities, which are in Illinois, Indiana and Tennessee.

Shares of Allegheny rose $1.12 yesterday on the New York Stock Exchange to close at $42.43.

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