PSEG Power LLC Cancels or Defers 6,800 Megawatts of New Capacity Due to Excessive Overbuild of Natural Gas Fired Combined-Cycle Power Plants

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). In August of 2003, PSEG Power LLC, a subsidiary of Public Service Enterprise Group (PSEG) (NYSE: PEG) (Newark, New Jersey), completed the addition (PEC 10002278) of the 850 megawatt (MW) natural gas fired combined-cycle Waterford Energy Project, located in Waterford, Washington County, Ohio (Plant 1047994). The project represented a 7% growth and now the company has over 13,000 MW, with an additional greater than 3,100 MW under construction in Indiana, New Jersey, and New York.

The company had planned for several thousand more megawatts in natural gas capacity, but had to cancel or delay indefinitely most of those projects due to the high cost of natural gas and a large amount of over building, causing prices to be uneconomical to run more plants.

The natural gas fired combined-cycle power plants under construction include the 1,150 MW Lawrenceburg Energy Project (Plant 1047943, PEC 11001745) in Lawrenceburg, Dearborn County, Indiana that is due online by end of the second quarter 2004, representing a growth of 8.8% for the year.

The second project is the 763 MW Bethlehem Energy Center (Plant 1011553, PEC 14001226) at the site of the Albany Steam Generating Station in Bethlehem, Albany County New York, due online during the second quarter of 2005. The third plant under construction is the 1,218 MW addition at the 775 MW Linden Generating Station (Plant 1504907, PEC 07001517) in Linden, Union County, New Jersey, also due online during the second quarter of 2005. The Linden Station is scheduled to retire 430 MW after completion of the addition. The Bethlehem and Linden projects will result in a net increase of 1,548 MW or about 11% for 2005.

These plants are all using General Electric (GE) turbines: MS7001FA combustion turbines with condensing GE D-11 steam turbines. The heat recovery steam generators (HRSG) are different at each location, Lawrenceburg has Aalborg Industries, Bethlehem has Nooter Erickson and Linden is utilizing Foster Wheeler.

Beyond 2005, there is currently no plan to install additional generation, thereby going from an average growth of 9% to nothing. The project cancellations total more than 6,800 MW, or about 50% of current capacity. At least four grassroot power plants were cancelled in Illinois, Indiana, New Jersey, and Ohio for 3,330 MW. The plants were 580 MW Sidney Power (Plant 1050521, PEC 09002542) in Sidney, Champaign County, Illinois; 1,100 MW Noblesville Power (Plant 1054326, PEC 11001899) in Noblesville, Hamilton County, Indiana; 550 MW New Marion Power (Plant1056939, PEC 07001738) in Jersey City, Hudson County, New Jersey, and the 1,100 MW Fostoria Energy Center (Plant 1054321, PEC 10002504) in Arcadia, Hancock County, Ohio.

Over 3,500 MW of additions at several plants have been cancelled or put on definite hold including 600 MW Bergen Generating Station (Plant 1008959, PEC 07001852) in Ridgefield Park, Bergen County New Jersey; 550 MW Bridgeport Harbor Generating Station (Plant 1018491, PEC 36000375) in Fairfield County Connecticut; 350 MW Burlington Generating Station (Plant 1008401, PEC 07001543) in Burlington, Burlington County New Jersey; 750 MW Kearny Generating Station (Plant 1014560, PEC 07001575) in Kearny, Hudson County New Jersey; 550 MW New Haven Harbor Generating Station (Plant 1015721, PEC 36000228) in New Haven, Newhaven County Connecticut and 750 MW Sewaren Generating Station (Plant 1014509, PEC 07001598) in Woodbridge, Middlesex County New Jersey.

PSEG has been in the utility business for 101 years and have paid dividends since 1907. They are ranked 176th on the Fortune 500 list for 2004 with assets of $28 billion and 2003 revenues of $11.1 billion and employ over 10,600 employees.

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