TXU chief sees only three new coal plants being built in Texas

Philadelphia (Platts)--8Nov2005

Only three new coal-or-lignite-fired plants are likely to be built in
Texas over the next few yars, two by TXU itself and one by San Antonio's
municipal utility, TXU Chairman and CEO John Wilder said Tuesday. 

     Other coal projects under development in the state will not secure the
power-purchase commitments and state air permits they will need to proceed to
financing and construction, Wilder said in response to reporters' questions at
the Edison Electric Institute's Annual Financial Conference. 

     TXU has already applied for a state air permit for a 1,720-MW
lignite-fired plant at its Oak Grove lignite mine site in Robertson County,
Texas. It has also signed a letter of intent with Alcoa for the development of
a 600-MW lignite-fired unit at TXU's Sandow site in central Texas. 

     San Antonio muni CPS Energy has been planning to build a 750-MW coal
plant at its Calaveras Lake coal station. 

     Wilder also downplayed concern that TXU's newly announced strategy to buy
or otherwise gain control over another 3,500 to 7,000 MW of coal-fired
capacity in the US might backfire if a federal carbon tax were implemented.

     TXU's coal plants would be as efficient as possible and be fitted with
the best available control technology, he said, adding that TXU's nuclear
assets would help to offset the financial impact of a carbon tax. 

     TXU is unlikely to buy any coal-fired assets in 2006 because of their
current high valuations, Wilder said. Instead, TXU's strategy calls for
acquiring coal plants on a more opportunistic basis, probably starting in 2007
or 2008, he said.

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http://electricityalert.platts.com.

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