SRP to buy natural gas-fired power plant in Arizona
The Salt River Project in Arizona has agreed to purchase one block of the Mesquite Generating Station located about 40 miles west of Phoenix. The natural gas-fired power plant, owned by San Diego-based Sempra U.S. Gas & Power, includes two 625-megawatt combined-cycle generating blocks. SRP is purchasing one of the blocks for $371 million and, under the terms of the agreement, will operate the entire facility. Sempra U.S. Gas & Power is a subsidiary of Sempra Energy
"We studied the market very carefully and determined that this purchase would provide an economic benefit to SRP and its customers," said SRP General Manager Mark Bonsall. "While recent load growth has been fairly modest, more substantial growth is expected and this plant will position us well in the long term to meet our customers' needs at a reasonable cost."
The agreement needs to be approved by the Federal Energy Regulatory Commission and the U.S. Department of Energy.
Bonsall said SRP will save money by purchasing an existing power plant now rather than building a new, more expensive facility in the future. As part of the purchase agreement, Sempra and SRP will form a joint operating entity called Mesquite Power Operations, LLC that will hold the plant permits.
The Mesquite Generating Station has been in operation since 2003. More than 30 people are employed at the plant and SRP said it anticipates hiring the existing staff.
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