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Taking advantage of cheap prices from swollen gas supplies, Public Service Enterprise Group Inc, a New Jersey power company, plans to spend $1.6 billion over five years to expand its natural gas and other power plants.
PSEG's investments regularly include capital for upgrading and expanding existing units. The combined-cycle plants were planned in its 2015-2019 budgets. Combined-cycle facilities use both gas and steam turbines to get more electricity out of the same fuel than a simple-cycle plant. PSEG is building one in Maryland and another in New Jersey and hopes to build a third in Connecticut.
Use of gas as fuel for electricity accelerated over the past decade with the increase in production from shale formations like the Marcellus in Pennsylvania and West Virginia. That increase in output pushed U.S. gas prices down to $2.61 per million British thermal units last year, the lowest level since 1999.
William Levis, president and chief operating officer of PSEG Power said, "One of the biggest changes we have seen with the collapse in gas prices is that our combined-cycle plants have become one of the workhorses of our fleet." Some of the combined-cycle units were running about 70 percent of the time up from just about 20 percent a decade ago, he added.
Levis said PSEG has an agreement in principle to shut its 383-megawatt coal plant in Bridgeport, Connecticut, in 2021, the only coal plant in the state. Before doing that, PSEG wants to first get approval to build a new gas plant at the site.
The company hopes to build the new combined-cycle plant with a capacity of around 500 MW in Bridgeport by the summer of 2019. One megawatt is likely to power about 1,000 homes, he said, adding that PSEG has no immediate plans to shut its other coal plants.