Exelon Power will actively pursue development of a 600-megawatt combined-cycle natural gas power plant in Pennsylvania this year, the company announced this week.

If a new power plant is ultimately developed, it will entail more than 500 construction-related jobs, a capital investment of more than $700 million and generate new property tax revenues for the host community. A power plant of this size would provide enough electricity for nearly 525,000 typical households.

A key factor in the company’s decision to pursue development opportunities now is the competitive market structure within PJM, Exelon Power President Mark Schiavoni said. Exelon Power is the non-nuclear generating unit of Exelon Generation.

“New power plants are critical to meet growing electricity demand and to maintain reliable electric service in Pennsylvania and the PJM region,” Schiavoni said. “The Reliability Pricing Model policy adopted by PJM and approved by the Federal Energy Regulatory Commission is designed to provide the transparent price signals we need in order to pursue a new power plant.”

PJM’s Reliability Pricing Model is designed to help ensure adequate resources to meet future demand by compensating power generators for the costs of building and maintaining power plants. For example, Schiavoni said, the pricing model program is a key driver of upgrades being explored that will eventually add additional generating capacity to Exelon’s low carbon nuclear generation fleet in PJM.

The plant would advance Exelon’s efforts to combat carbon emissions associated with electricity generation. Exelon’s chairman, president and CEO John W. Rowe has established a corporate-wide goal of reducing, displacing or offsetting the equivalent of Exelon’s entire carbon footprint by 2020.

Exelon Power is in the initial stages of looking at several existing power plant sites it already owns because those properties have the access to transmission lines, water, and fuel needed to operate a new power plant. Within the next six months the company expects to narrow the list of sites, begin talking with local communities in potential locations, develop and submit applications for required environmental permits, and establish a timeline for submitting applications for local construction permits and obtaining any required zoning approvals.

Schiavoni said the company would work with state agencies to complete the permit review process as quickly as possible so that it can bring much needed new power on line as quickly as possible. He said the company would make a final decision on whether to move forward only after it has more certainty around the environmental permitting process as well as a detailed economic review of building a new plant.

The earliest that a plant could be operational is 2012.

NewsClip: Exelon Considering New Power Plant for Region

5/2/2008