ERCOT 2019 Summer Quarter Outlook

LCG, May 29, 2019-- LCG released a new summer (June – September 2019) report that looks at how the ERCOT grid copes with strained network conditions. Resource adequacy analysis for the region is especially important during extreme summer loading conditions. This summer the network is under particular scrutiny as the reserves have tightened because of recent retirements.

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South Field Energy Breaks Ground for 1,182-MW Power Plant

LCG, May 16, 2019--South Field Energy LLC announced yesterday its groundbreaking for an 1,182-MW, combined-cycle electric generating facility in Columbiana County, Ohio. The natural gas-fired facility is scheduled to commence operations in mid-2021 and represents a $1.3 billion investment.

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Industry News

Enron Wants Out of India

LCG, July 30, 2001-- Enron Corp. wants the Indian government to buy out its stake in the controversial $2.9 billion Dabhol Power project near Bombay, India's biggest foreign direct investment, the Financial Times reported Saturday.

"We want out," Enron Chairman Kenneth Lay told the paper. And with work on the nearly-complete second phase of the Dabhol Power Project now halted, GE Capital and Bechtel Enterprises were also interested in selling their stakes, he added.

Enron owns 65 percent of the $2.9 billion Dabhol project, with GE Capital and Bechtel each owning 10 percent. The remaining 15 percent is owned by the Indian state of Maharashtra's State Electricity Board, the government-run utility.

The 2,184 megawatt gas-fired Dabhol power plant on India's west coast not far from Bombay is the country's largest foreign investment. The 740 megawatt first phase of the project began producing power last year and the Maharashtra State Electricity Board almost immediately began delaying payment for power delivered to it. Each month, Dabhol has been forced to invoke first the guarantees of Maharashtra state and then those of India itself in order to get paid.

With the 1,444 megawatt second phase of the project nearly complete, work was halted because of the ongoing brouhaha with state and federal bureaucrats. Last month, the state added a new layer of officialdom, the Maharashtra State Electricity Regulatory Commission, which Enron has declined to recognize.

On Friday, GE Capital said it would "give serious consideration to credible offers, which would enable us to realize our financial objectives for this investment." A statement from Bechtel was not available.

The Maharashtra State Electricity Board says Dabhol's power is too expensive and has abrogated both its power purchase agreement signed in 1995 and its commitment to the $1.8 billion second phase of the project. The second phase also includes India's first liquefied natural gas project and Enron has 20-year contracts with Arab Emirates for 2 million tons a year of LNG for the power plant and other users.

Failure of the Dabhol project would be a serious black eye for India in its efforts to attract foreign infrastructure investment, a fact noted by Lay. "The government now realizes this is a serious impediment to foreign investment and other business relationships in India and there is an urgency to get it resolved," he said.

"We have fought this once before, put it back together, fixed the contracts, but we don't want to do that again and have the same problems in a few years," he said. Enron was involved in arbitration over the Dabhol power purchase contract in 1995 with the former Indian government, the Financial Times said.

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