Coal, New Projects

City Public Service mulls building new coal plant

OGJ Online

AUSTIN, Texas, Oct. 11, 2000—City Public Service Co., the second largest municipally owned electric utility in the US, is considering building a new coal-fired power plant in the San Antonio area.

Speaking a at conference here, Milton Lee Sr., vice-president electric transmission and distribution for CPS, said the utility is definitely going to build a new power plant, and it will very likely be coal.

“We would like for San Antonio to build a new coal plant,” said Lee.

That might sound a little strange given the higher capital costs when compared to a combined cycle plant but the utility is accustomed to stepping out of line. Lee addressed the Gulf Coast Power Association’s fall conference in Austin “Implementation of Customer Choice in Texas” today.

“When we built Spruce (a coal-fired plant) in the mid-80s, everybody thought we were crazy,” he said in an interview. “Now with gas prices what they are, it was good decision.”

Lee says a likely site will be adjacent to its existing Spruce power plant. He pointed out there is transmission service available, cooling water in existing lakes, and plenty of room on the acreage.

“Our only concern at this point is permitting and how the community will feel about another coal-fired plant on that side of town,” he said.

The plant would be Spruce’s twin with 528 Mw, he says.

CPS provides San Antonio with all the power it requires. It has sufficient generating capacity to export power and sell on the wholesale market. Plans call to expand participation in the wholesale market as it becomes more vibrant, he says. Building more generation will ensure that CPS can meet its load growth with its own generation and still have enough to play in the market.

CPS is not going to participate in the retail market that is set to open in Texas in January 2002. “We have not even elected the city council that will make that decision,” he says. “But we are preparing as if council will say for us to participate.”

So far the utility has not sensed any “groundswell” for competition from its customers. CPS says it has relatively low bills and relatively reliable and adequate service.

Meanwhile, CPS operates with a 15% reserve margin which explains why thoughts have turned to new generation. With the load growth in San Antonio, CPS will need new generation in place in 5 years, he said.

Lee would not be more specific about when a decision will be made to build a new plant, but one must be made fairly soon if coal is to be used as the fuel.