Control Number : Item Number: 353. Addendum StartPage : 0

Transcription

1 Control Number : Item Number: 353 Addendum StartPage : 0

2 OPEN MEETING COVER SHEETe MEETING DATE: November 16, 2012 DATE DELIVERED: November 13, 2012 AGENDA ITEM NO.: 37 CAPTION: ACTION REQUESTED: Project No : Commission Proceeding to Ensure Resource Adequacy in Texas. Memo from Commissioner Anderson Distribution List: Commissioners' Office (6) Lloyd, Brian Albright, Jim Central Records Featherston, David (2) Flores, Leticia Urban, John Paul Pemberton, Margaret (3) Journeay, Stephen Renfro, Mike Tietjen, Darryl (2) Long, Mick (2) Whittington, Pam (3) Hunter, Tom 353

3 TO: Public Utility Commission of Texas Chairman Donna L. Nelson Commissioner Rolando Pablos Memorandum oe FROM: DATE: Commissioner Kenneth W. Anderson, Jr. November 12, 2012 kw, I6) Pzrrn;.Ss1, 0 RE: November 16, 2012, Agenda Item No. 37, Project No : Proceeding to Ensure Resource Adequacy in Texas. Commission At the suggestion of a legislative leader, I am filing a presentation I have been sharing that shows my analysis of ERCOT's current resource adequacy situation. For your information attached please find my presentation titled "Analysis of ERCOT's Capacity Reserve Margin" and a compilation of three recent press reports on new generation. Page 1 of i

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13 Recent Press Reports of New Power Plants (October 26, 2012) Two of the three plants mentioned are neither in ERCOT's May CDR. nor in my Revised Projected CDR analysis of the capacity reserve margins, and would constitute a net additional increase of capacity of 950 MW, which is a more than an one (1%) percentage point additional increase in the capacity reserve margin. 1. This Plant IS in ERCOT's May 2012 CDR for 2016: FROM Project Finance Magazine Web page (the rest of the article is password protected): Panda plots Temple phase II 25 October 2012 Panda Power Funds expects to finance the 785MW second phase of its Temple gas-fired project in 2013, The Temple phase II financing likely will... Take a free website trial to read this article. It's easy to get a trial - just follow this link or info@projectfinancem agazine.com. Or, if you're a subscriber or have an active trial, simply log in below to read the article. Subscribe II. This Plant is NOT in the May CDR or KWA's Revised Projected CDR: THE BROWNSVILLE HERALD

14 Commissioners considers incentives for power plant mvrv vnnne Posted: Thursday, October 1?; :56 pm I Updated: 10:29 am, Fri Oct 12, 2012 Commissioners considers incentives for power plant By EMMA PEREZ_TREVIhtO The Brownsville Herald A Plano-based company is seeking an agreement with the city of Harlingen to not annex land where it wants to build a power plant outside city limits, near Valley International Airport. The company is negotiating possible tax incentives of as much as $9 million with Cameron County. Cameron County Commissioners Court voted Thursday to negotiate a tax abatement agreement with La Paloma Energy Center LLC, which wants to build a $650 million electric generating plant near the industrial park. The company plans a 700-megawatt natural gas-fueled electric generating plant, a company representative told the Commissioners Court. Don Hubbard, with the Harlingen Economic Development Corp., accompanied John Upchurch, a representative of La Paloma, to the Commissioners Court meeting, but did not address the court. HE DC refers to the prospective initiative as "Project Waterside." For now, HEDC Executive Director Raudel Garza and Mayor Chris Boswell are not providing details about their negotiations with La Paloma. "I think commenting on this at this time is premature," Garza said. "We are always supportive of projects that will lead to new jobs and increased tax base."

15 Boswell said: "All we can say at this time is that this is an economic development project currently identified as Project Waterside. If we are successful, it will create jobs and provide needed infrastructure for future development." According to an economic impact study prepared for La Paloma, the project would create up to 750 jobs over the three-year construction phase and, when in operation in the fourth year, 30 full-time jobs with average annual salaries of about $75,000. The project's development and construction would generate $1.4 billion in economic output, support 3,342 direct, indirect and induced construction jobs, and generate $379 million in direct, indirect and induced construction salaries for area workers, the company's report stated. Upchurch asked the Commissioners Court to abate all property taxes in the power plant's first four years, followed by a 90 percent abatement in the fifth year. The abatement would decrease to 80 percent in the sixth year; 70 percent the seventh year; 60 in the eighth year; 50 percent in the ninth year and to 40 percent in the 10th year following construction. Tax abatements would end after the 10th year and the plant's assets of about $502 million would be added to the tax rolls, Upchurch said. The company is also seeking tax abatements from the Texas Southmost College District. Under the company's proposal, the county would abate nearly $9 million in taxes and the college would abate nearly $4 million. Responding to Commissioners Court questions, Upchurch said the company would be open to other tax incentives instead of abatements. "We have no problem with that," Upchurch said. County Planner Frank Bejarano told Commissioners Court that granting tax abatements on a county-wide basis to a project that is neither an industrial nor manufacturing activity would require a deviation from current policy. Commissioners Court indicated that it is open to amending the policy. III. This project is NOT in ERCOT's May 2012 CDR or KWA's Revised Projected CDR: 3

16 Natural Gas-fired Power Plant Coming By Dianna Wray Victoria Advocate October 24, 2012 POINT COMFORT - The group clambered up the metal stairs of the defunct ES Joslin power plant, and stepped out onto the roof. Roy Hart, executive director of development for Sargas Texas, waved a hand to get everyone's attention. "You see that out there?" he asked, pointing to an empty space of overgrown grass near the water's edge at the Calhoun Port Authority. "That's where the Stargate power plant will be." The site is empty now, but in 2015, Sargas Texas will install a natural gas-fired power plant in that spot. The Stargate 250 plant, once it is up and running, will be one of the first in a new generation of natural gas-fired power plants in the country where carbon dioxide emissions are captured and reused instead of being released, reducing emissions by 85 percent. The plant will also bring 60 to 65 jobs to the county, Hart said. About 50 people representing various companies Involved in building the plant and county officials gathered at the Calhoun Port Authority on Wednesday afternoon to talk about the plant at a luncheon and view the site. The new Stargate Point Comfort facility will produce 250 megawatts of power and produce "pipeline quality C02" that will be good for enhanced oil recovery projects. All of this will be powered by a natural gas-powered turbine, the LMS100 produced by General Electric. GE has partnered with Sargas to create these power plants, which will be fired by natural gas and where the carbon dioxide emissions will be turned into liquid carbon dioxide that can be injected into oil wells to get them flowing again. Dean Athans, GE general manager of the LMS100 turbines, said a natural gas-powered plant was just common sense in this day and age. Since hydraulic fracturing and slant drilling of shale plays in the past decade, there has been a glut of natural gas on the market. The United States has become one of the biggest producers of natural gas in recent years, causing natural gas prices to stay relatively low, he said. Natural gas also has less emissions than other forms of fuel, making it a better alternative, Athans said. "It's plentiful, it's cheap and it's clean. This is a watershed moment," Athans said. 4

17 When they were choosing a site, Jim Burnette, a consultant with Texas Energy Development Services, said the Point Comfort location made sense because it was based on the Gulf coast and it was near various oil fields, including the booming Eagle Ford Shale play. Burnette's company has worked with the Norwegian-based Sargas to build this power plant for the past six years, he said. Burnette said the interest of port authority members was key in their choice of location. "There are four ports along the Texas coast, but the port board members here are entrepreneurs, focused on doing what it takes to get industry into the region," he said. The plant will be built in a shipyard in South Korea by Daewoo Shipbuilding and Marine Engineering Co. Ltd. The plant will then be moved more than 7,000 miles on a submersible barge to dock at the Calhoun Port Authority. Once it arrives, water will be released from the barge hold, allowing the plant to rise up to the level of the water's edge. The plant will then be landlocked, Hart said. Port officials had been working to get the plant built in their port for the past year, Calhoun Port Authority Director Charles Hausmann said. Once it has been installed, the plant will hook up to the power grid through the ES Joslin facility, a power plant that closed in 2003 due to inefficiency. Calhoun County Judge Mike Pfeifer was enthusiastic about the development. "It's incredible. There are almost no emissions from this type of plant. I think it's going to bring a whole new aspect to power generation in this country and this area," Pfeifer said. 5