TransCanada Signs Contract to Generate Arizona Power
CALGARY, ALBERTA--(Marketwire - May 12, 2008) - TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada) today announced that the Phoenix, Arizona-based utility Salt River Project (SRP) has signed a 20-year power purchase agreement to secure 100 per cent of the output from TransCanada's planned Coolidge Generating Station.
The approximately US$500 million simple-cycle natural gas-fired peaking power facility, located in Coolidge, 72 kilometres (45 miles) southeast of Phoenix, will have a nominal capacity of 575 megawatts and is expected to be online by May 2011 in time to meet peak power demand. The facility will receive natural gas from both the El Paso Natural Gas and Transwestern pipelines, and will connect to a new SRP high-voltage transmission line currently under construction.
"We are delighted to continue expanding our U.S. assets and presence with the completion of this agreement with Salt River Project," said Hal Kvisle, TransCanada president and chief executive officer. "The western U.S. and specifically Arizona represents an attractive growth market in North America for additional power generation and transmission projects. Arizona's population is expected to grow 50 per cent by 2020 and to double by 2030, and TransCanada wants to help serve this demand."
TransCanada has studied this market for a number of years and has been pursuing select opportunities over the past two years. TransCanada's proposal for the Coolidge Generating Station was submitted in 2006 in response to SRP's request for proposals to provide peak generating capacity for SRP's service territory in Maricopa County and Pinal County. The simple-cycle natural gas-fired peaking facility will provide a quick response to peak power demand. With 12-LM6000PC turbines, the facility will also provide reserve capacity and the ability to generate power quickly to support power reliability in the region. The design incorporates nitrogen oxides (NOx) reduction technology including dry low NOx burners and selective catalytic reduction equipment to achieve the emission requirements of Pinal County.
"Power from the proposed Coolidge Generating Station will be an important addition to SRP's energy portfolio," said John Coggins, SRP's manager of resource planning. "This is a cost-effective decision that will benefit our customers as we continue to seek long-term solutions to ensure sufficient energy supplies."
The power purchase agreement provides a 20-year capacity payment, and operating and maintenance cost recovery. SRP has the right to extend the contract for another 10 years. SRP is the sole customer of the capacity and energy from the facility.
The new facility will be an economic boost to the mostly rural community of Coolidge, providing hundreds of jobs during the construction phase and approximately 12 permanent full time jobs when completed. The facility is anticipated to provide a significant amount of revenue to state and local governments.
TransCanada consulted with elected officials and government agencies and held its first round of public stakeholder meetings and a community open house in February. TransCanada has filed with the Arizona Corporation Commission a notice of application and will file a full application for a Certificate of Environmental Compatibility in summer 2008. During the permitting phase, TransCanada will seek an air quality permit and local zoning approvals, and there will be extensive public outreach to keep the community fully informed and to gather input. Construction is expected to begin in late 2009.
SRP is the third-largest public power utility in the United States, serving more than 935,000 electric customers in the greater Phoenix metropolitan area. SRP's revenue bonds are rated "AA" (S&P).
With more than 50 years' experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas pipelines, power generation, gas storage facilities, and projects related to oil pipelines and LNG facilities. TransCanada's network of wholly owned pipelines extends more than 59,000 kilometres (36,500 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services with approximately 355 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns, or has interests in, approximately 7,700 megawatts of power generation in Canada and the United States. TransCanada's common shares trade on the Toronto and New York stock exchanges under the symbol TRP.
Note: All financial figures are in Canadian dollars unless noted otherwise.
This news release may contain certain information that is forward looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward looking information. All forward-looking statements reflect TransCanada's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Factors which could cause actual results or events to differ materially from current expectations include, among other things, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the Company's pipeline and energy assets, the availability and price of energy commodities, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy industry sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and the current economic conditions in North America. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause TransCanada's actual results and experience to differ materially from the anticipated results or expectations expressed. Additional information on these and other factors is available in the reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this news release or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
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