TXU Corp. (TXU) plans to build 5 to 8
gigawatts of coal generation in the PJM Interconnection transmission
region and will consider sites in
Pennsylvania, Virginia and
West Virginia, Chief Executive Officer John Wilder
said during the company's first-quarter earnings conference call Tuesday.
Dallas-based TXU, which last month announced a plan
to invest $10 billion in new coal generation in
Texas, is currently weighing about a dozen expansion
opportunities in the PJM region, Wilder said. TXU will also look to enter
into long-term power contacts with manufacturing facilities that paying
high prices for electricity generated by natural gas, he said.
The company plans to announce its first project outside of the Electric
Reliability Council of Texas later this year, Wilder said.
TXU may build some of the planned coal plants at the sites of existing
gas plants that have been taken off line, he said. The company will also
look to build plants in proximity to existing coal sources.
"We want to take this show on the road," Wilder said. "There's actually
a substantial amount of interest in states in PJM. Every customer across
the nation has the same need to access more stable, secure long-term power
to get off highly volatile gas-on-the-margin generation in many of these
markets."
TXU is looking to sell some of its inefficient gas-fired plants, but
the sales are not expected to generate significant capital for the
company, Wilder said.
TXU owns 14 natural gas plants in Texas with
10,000 megawatts of total capacity. Most of the plants were built before
1980 and are inefficient by modern standards.
-By Christine Buurma; Dow Jones Newswires;
201-938-2061; christine.buurma@ dowjones.com
TXU also plans to finance $10 billion of new coal
generation in Texas as a single package, rather than
financing each plant separately, acting Chief Financial Officer
David Campbell
said during the company's first quarter earnings conference call Tuesday.
TXU has already received an $8 billion to $9 billion
financing proposal for the coal plants, Campbell said. He didn't say which
firm or firms submitted the proposal.
The Dallas energy holding company plans to fund
the bulk of the project with non-recourse debt and will also consider
selling a stake in the project to an equity partner or partners, Campbell
said. TXU expects to finance the project with a ratio of 65% debt to the
underlying value of the debt collateral package.
TXU expects a typical plant in the portfolio to return 45% of cash in
the first five years of operation and to break even after eight years,
Campbell said.
-By Christine Buurma; Dow Jones Newswires;
201-938-2061; christine.buurma@ dowjones.com
