GREENVILLE —
Officials who have spent the past decade attempting to build a giant electric generating plant north of Greenville believe a move this week by state electricity regulators is a step in the right direction, but does not go far enough to address the long term funding shortage problem.
“By raising the cap, that certainly makes the market look better,” said Gregory Platt, vice president of the Houston-based Cobisa Corporation of Thursday’s decision by the Texas Public Utility Commission to raise the wholesale electricity price cap by 50 percent this summer in a move it hopes will spur construction of new power plants.
However, Platt said the action is not likely to convince major investors to contribute significant capital in projects, given the still uncertain nature of the economy.
“It is hard to fit the square peg into the round hole, given the market we’re in,” Platt said.
The Associated Press reported that Texas officials say the state must boost generating capacity to meet growing demand in the next few years to help avoid rolling blackouts during peak periods such as hot summer days. Supporters of the increase hope the lure of new profits will spur power companies to build more power plants. But consumer groups warn it could raise costs by billions of dollars, leading to higher electric bills for Texas households.
Thursday’s vote by the three-member commission raises the wholesale rate on Aug. 1 from the current $3,000 per megawatt-hour to $4,500. Commissioners are already considering tripling the price to $9,000 in 2013.
Platt said he and Cobisa President Thomas “Coby” Knox met with the commission in February, and urged the panel to develop a way to build confidence that the market will remain in a state which will allow investors to make a profit.
“We told Chairman (Donna) nelson that you’ve got to give investors some kind of surety that they are going to get their money back,” Platt said. “It’s still a problem.”
In 2002, officials with Cobisa announced plans to build a 1,750 megawatt natural gas-fired electric generating plant on 104 acres off of U.S. Highway 69 just north of the Greenville city limits. Initially expected to cost $500 million, some recent estimates have put the cost at closer to $1 billion.
In May 2008, the Greenville City Council approved significant changes to the original Industrial District Agreement (IDA) with the Cobisa Corporation. The amendment postponed the date when the proposed project might be annexed into the city limits, set up a Payment In Lieu of Taxes (PILOT) plan and altered the specifics for how much water the company would purchase from the City of Greenville for the plant.
Platt said the company is still very interested in coming to Greenville.
“We have been keeping all of our necessary permits alive,” Platt said, adding he plans to meet soon with the city administration, including the mayor and two new Council members who took office in May, to update them on the project.
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