Michigan Merchant Power Plant on Hold

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Researched by Industrial Information Resources, Incorporated; Houston, Texas). The plan to build a $350 million, 605 megawatt (MW) combined-cycle, merchant power plant in Michigan by Kalkaska Generating Limited Liability Company (LLC) is currently on hold until the end of this year (PEC 18001526), due to the company's inability to attain a power purchase agreement (PPA). Construction has not started for this fully permitted project because no buyer has been found, the economy slowed down, and industrial development is depressed in the area.

The planned Kalkaska Merchant Power Plant (Plant 1057254) will consist of two 170 MW combustion turbines, attached by two heat recovery steam generators (HRSGs), and a 265 MW steam turbine. The 40-acre site was chosen for its nearness to both natural gas lines and power lines.

As a "merchant" power plant, it will market and trade its output into the wholesale market to utilities and power marketers. The power produced by merchant power plants can be used by the utilities to support the grid during times when demand for energy is higher than normal. However, utilities and power marketers are not required to buy power from merchant plants. To stay competitive, these plants must be able to produce electricity at prices more reasonable than other plants operating in the same market. Merchant plants cannot sell retail electricity to businesses or individuals.

The ERORA Group LLC (Louisville, Kentucky) will be the developer and operator of the facility. The company was formed in 1999 as a privately owned developer of merchant energy and cogeneration projects.

Check out Industrialinfo.com's new 2004 Power Industry Forecast, analyzing capital spending trends for the North American (Canada, Mexico, and U.S.) Power Industry.