MidAmerican Adding 1,640 MW to Iowa's Power in Coal, Gas and Wind Generation

---

Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Another project in the wave of super clean power generation plants saw construction begin this month at the Council Bluffs Power Station (Plant 1014234) in Iowa. MidAmerican Energy Company (Des Moines, Iowa), the developer and operator of the project (PEC 29000701), will be implementing advanced supercritical technology in the 790 MW coal-fired plant. Council Bluffs has three existing units currently generating a total of 820 MW.

MidAmerican claims that this will be the first plant in the U.S. to use the technology, which will incorporate selective catalytic reduction and 'dry scrubbers' among a number of advanced technologies which will supplement the supercritical boilers which create steam at higher temperatures and pressures than traditional plants. The process converts coal to electricity more efficiently thus reducing emissions.

This will be the largest electricity generation project worldwide for MidAmerican Energy Holdings Company (MAEHC) (Des Moines, Iowa), a subsidiary of Berkshire Hathaway Incorporated (NYSE:BRK.A, BRK.B) (Omaha, Nebraska) and one of the largest to date in the Midlands area. With a completion date scheduled for the summer of 2007 the construction phase of the project will create more than 1,000 jobs on a payroll of over $300 million.

Other partners with MidAmerican in the project are Central Iowa Power Cooperative, Corn Belt Power Cooperative, Lincoln Electric System, municipal Energy Agency of Nebraska and the Iowa cities of Alta, Cedar Falls, Eldridge, Montezuma, New Hampton, Pella, Spencer, Sumner, Waverly and West Bend. Combined these utilities provide electricity to more than one million customers. Nebraskan utilities have contracted to purchase 150 MW of the new plant's capacity.

Greg Abel, president of MAEHC said, "The environmentally responsible use of coal is a vital part of our energy portfolio because it is indigenous, plentiful and low-cost." A long-term contract has been signed by MidAmerican with Union Pacific Railroad to transport coal to the new plant from the Powder River Basin in Wyoming.

Japanese experience as a world leader in the development of supercritical technology will be in evidence at the latest Council Bluffs project. Construction is the responsibility of Mitsui & Company (Tokyo, Japan) with Hitachi Ltd (NYSE:HIT) (Tokyo, Japan) providing boilers, power turbines and other critical technology expertise.

Sargent & Lundy (Chicago, Illinois) is the design engineer and Kvaerner Songer, (Washington, Pennsylvania) (Aker Kvaerner, Oslo) is the general work contractor. The company is looking to invest and additional $300 million on environmental improvements to existing coal-fueled plants through 2010 as part of an emissions reduction plan MidAmerican has filed with the Iowa Utilities Board.

In a stated commitment to keeping Iowa's electricity rates stable through 2010, MidAmerican is planning to add new and diverse sources of generation to the state's power pool. In May, the company completed phase 1 startup of the 350 MW natural gas generating plant for the Greater Des Moines Energy Center (PEC 29000631, Plant 1012874). See archived IIR Industry Alert: MidAmerican Energy Begins Commercial Operation of Greater Des Moines Energy Center, for details. Another 190 MW will be added when phase 2 is completed in December 2004.

MidAmerican is also committing to renewable energy with a proposed 310 MW windpower generating facility which will be sited in Iowa. The $323 million project (PEC 29000709), which, after extensive wind current studies, will probably be sited in northern Iowa near the Dakota border in the central axis of the state. Three other windfarms, operated by other companies, already operate in that region of Iowa.

The new windfarm will have from 180 to 200 turbines each with a rated generating capacity of 1.5 to1.65 MW each mounted on towers around 400 feet high. The facility is placed near enough to potential users and power networks to enhance its energy trading profile. MidAmerican hopes to have the first turbines placed by the end of 2004 and the windfarm operating at full capacity sometime in 2006.

Another large straw in the wind for the positive prospects of the farm and windpower in general is that the investment icon Warren Buffet is fully behind it. His company Berkshire-Hathaway has a majority 80% stake, on a fully diluted basis, in MAEHC.

MidAmerican has around 15% of its global power portfolio in green power including the current development of a 185 MW geothermal steam turbine project (PEC 06003507) operation in Southern California's Imperial Valley that will be the largest of its type in the world.