Constellation Energy Source wins major pact in Nashville

$43.6 million deal includes building a power plant

February 05, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

Constellation Energy Source has won a $43.6 million contract to design, build and operate an energy power plant that will heat and cool 39 major buildings in Nashville, Tenn., company officials said yesterday.

The plant will use chilled water and steam produced by the Metropolitan Government of Nashville and Davidson County. It will heat and cool the Tennessee State Capitol, Adelphia Coliseum - home of the Tennessee Titans National Football League team - and Gaylord Entertainment Center, which is home of the Nashville Predators National Hockey League team.

Constellation Energy Source, a subsidiary of Baltimore's Constellation Energy Group Inc., will operate the system through a 15-year management agreement that includes an option for three five-year extensions.

The project will result in an additional $105 million in revenue for Constellation Energy Source, which beat out four other national companies in a selection process that took almost a year.

"Constellation Energy Source consistently demonstrated that they were the best company for this project," said David L. Manning, finance director of the Metropolitan Government of Nashville and Davidson County. "Constellation Energy Source has the corporate backing, the experience and the people that I am confident will make this project a success."

The plant is expected to save Nashville about $66.9 million by 2014 and lower heating and cooling costs for downtown customers. The project will be financed by revenue bonds and be supported only by revenue generated from the sale of chilled water and steam, Manning added.

The plant will replace a waste-to-energy facility that began operating in 1973.

The Tennessee contract is Constellation Energy Source's largest to date.

In the past year, the utility has won contracts for similar projects at Aberdeen Proving Ground, the Rouse Co.'s Fashion Show Mall in Las Vegas, and in Pittsburgh for the Pittsburgh Steelers football team.

"This contract fits our strategy and it demonstrates that we have the capability to perform large complex projects," said Gregory S. Jarosinski, president of Conestellation Energy Source.

Construction is expected to be completed in 2004.

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