The property is almost perfect for a gas-fired power plant: a remote part of Rockingham County, next to the only interstate gas pipeline that runs through North Carolina and near major transmission lines of Charlotte-based Duke Power Co., the electric utility for much of western North Carolina. But Duke didn't build there. Houston-based Dynegy Inc. did, at Duke's urging. The Dynegy plant, generating power for Duke since June, is the state's first speculative commercial power plant built and operated by an out-of-state energy company. Its contract with Duke is for less than four years compared with 15 at traditional nonutility plants.
Get used to it. More are on the way. Columbia, S.C.-based SCANA Corp. was negotiating with Fayetteville to build a pipeline to a gas-fired plant it would build and partially own. SCANA wouldn't sell directly to North Carolina electricity consumers -- its 40% share of the plant's output would go back to SCANA's South Carolina distribution system -- but the pipeline would give it a launching pad to supply gas to other power plants and businesses in Eastern North Carolina. That is a stronghold of Carolina Power & Light Co. and North Carolina Natural Gas Corp., both subsidiaries of Raleigh-based Progress Energy Inc., which until December had been CP&L Energy Inc. The deal would be SCANA's first big score since entering the North Carolina gas market by acquiring Gastonia-based Public Service Company of North Carolina Inc. in February 2000.
Another newcomer, Houston-based Enron Corp., wants to build a $120 million plant near Rocky Mount to supply power to Virginia Electric & Power Co., part of Richmond, Va.-based Dominion Resources Inc. And Dynegy is looking for other plant sites. When the state's retail electricity markets are deregulated, probably five to 10 years from now, Dynegy could end up buying plants from homegrown utilities.
Duke, which builds plants freely on other utilities' home turf, hasn't built one on its own since 1995 -- too much uncertainty about how retail deregulation, which will allow users to choose their suppliers, will play out in North Carolina. Duke can recoup its investment faster on unregulated plants it builds outside its retail distribution system.
Duke Power's parent, Charlotte-based Duke Energy Corp., opened its first merchant plant, which sells power to other distribution systems, in Bridgeport, Conn., in 1998 and now has U.S. plants as far-flung as Maine and California. Progress got...