Big power cost pass-throughs deepen hedging controversy

This summer’s sharp rise in natural gas and purchased electricity costs caught many US utilities off guard and sharpened interest in hedging strategies that could be used to protect consumers from price hikes.

Southern Illinois Power Cooperative (SIPC)has awarded Foster Wheeler Energy Corp. a $50 million contract to repower an SIPC power plant near Marion, Ill, Foster Wheeler reported. The contract calls for Foster Wheeler to provide a 120 MW circulating fluidized-bed (CFB) boiler designed to burn bituminous coal fines. The coal fines are a byproduct of modern coal mine wash plants, which over the years have stored this waste material in piles and ponds, representing an environmental concern. This project is one of the first repowering projects in the US designed to fire 100% waste coal. Construction is expected to begin in July 2001, with commercial operation scheduled for February 2003.


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