Advanced technology to provide cleaner, more efficient power for entire
Queens, NY — April 20, 2004 — Astoria Energy LLC (Astoria Energy) announced that it has closed on $983 million in financing for construction of New York City’s largest new power plant in more than 25 years. Construction of the project will begin immediately, with commercial operation projected for April, 2006. The Astoria Energy plant will use state-of-the-art, natural gas, combined cycle gas turbines to produce 500 megawatts (MWs) of electricity in its first phase, which represents approximately 5% of the City’s peak power requirements.
The Astoria Energy project was conceived in 1999, and – in addition to a host of permits and approvals – received formal approval for a 1,000-MW facility from the New York State Board on Electric Generation Siting and the Environment in November 2001.
This environmentally progressive project is located on a 23-acre site in northwest Queens, which for the past 50 years served as an oil storage and distribution facility; it also is approximately 3,000 feet from the Astoria substation complex owned by Consolidated Edison Company of New York to which the new plant will interconnect for transmission of the electricity that it will generate. The financial closing announced today will cover the first 500 MW of generating capacity.
The $983 million construction financing package combines $283 million in equity and $700 million in debt. Equity investors include CDP Capital-Americas, a subsidiary of the Caisse de dàƒ©pàƒ´t et placement du Quàƒ©bec, SNC-Lavalin Generation Inc., the Energy Investors Funds Group, on behalf of US Power Fund, L.P., and project sponsors SCS Energy LLC and AE Investor. Major institutional investors participated in the debt financing, which was raised by Credit Suisse First Boston.
Generating much-needed power for New York City
“Every day, New York City consumes almost as much energy as it generates – creating a precarious situation that constrains the City’s economic growth, and has little margin for error to ensure electric system reliability,” said James L. Croyle, a Principal of SCS Energy LLC. “After weathering a tumultuous economic climate, we’re very pleased to move this project to the construction phase so we can provide New York with the power it so desperately needs for its reliability, competitiveness and continuing economic growth.”
Governor George E. Pataki said, “The new Astoria Energy plant will use smart, environmentally-responsible technology to meet New York City’s current and growing energy demands. This new plant will ease constraints on New York’s overloaded system, help to control energy prices, and simultaneously address important environmental issues that relate to power production.”
Mayor Michael R. Bloomberg said, “Astoria Energy is delivering an important project that will enhance reliability, promote economic growth and address environmental issues. As the City’s Energy Policy Task Force concluded in its report earlier this year, New York City will need additional power to meet our growing energy needs. It’s critical that we also promote greater energy efficiency, retrofit existing power plants and appropriately site new transmission lines to support our economic growth.”
The Energy Policy Task Force Report concluded that the City needs 2,600 megawatts of new electricity resources by 2008. Power Alert III, issued in May 2003 by the New York Independent System Operator (NYISO), also cites significant concerns about the marginal adequacy and reliability of both the State and City’s electrical generation and distribution systems.
To ensure reliability, State regulations require that at least 80% of the energy consumed in New York City must be produced within the five boroughs of New York City. While the city may “import” a portion of its electric supply, transmission lines bringing power into the city are constrained and congested, exacerbating the scarcity of energy as a whole. As a consequence, energy prices in New York City remain an average of 20% higher than those in the rest of the state. As a new source of in-city generation, Astoria Energy will ease the constraints placed on the system, especially during peak demand periods.
Cleaner, more efficient technology
“Astoria Energy is very pleased to be able to provide superior, environmentally-responsible technology to New York City,” said Joseph C. Swift, also an SCS principal. Air emissions will be significantly lower than those permitted by both Federal and State regulations. Air-cooled condensers will minimize the project’s impact on the public water supply system, reducing water consumption by at least 90% compared with plants with cooling towers. The plant will not draw water from – or release water into – adjacent bodies of water.
To fuel its highly efficient gas turbine generators, Astoria Energy will use natural gas – the cleanest and safest source of energy for large-scale applications – delivered to the plant through a short interconnection to an existing Con Ed gas pipeline. The plant is licensed to switch to ultra low-sulfur distillate fuel oil for up to 720 hours per year. Sophisticated emissions controls are engineered into the design of the Astoria Energy plant, including selective catalytic reduction and an oxidation catalyst, so as to meet the U.S. Environmental Protection Agency’s Lowest Achievable Emission Rate and Best Available Control Technology standards.
Con Ed to purchase power
Morris Bailey, a principal of AE Investor LLC, who played a significant role in the financing of this project, said, “The financing secured for the Astoria Energy project underscores New York’s critical need for the power this plant will generate.” Last year, Astoria Energy secured a ten-year contract with Con Ed to purchase the initial 500 megawatts generated by the project. As a state-of-the art facility, Astoria Energy will be able to offer competitive prices. By being located in the heart of the Astoria, Queens load pocket, Astoria Energy will increase the reliability of the city’s transmission system and help lower congestion costs for all New York City ratepayers.
All government approvals have been obtained
Since development of this project began five years ago, Astoria Energy has obtained all of the permits required to begin construction: its application was approved unanimously by the State’s Siting Board in November 2001, and it has obtained the required Title V and PSD air permits, as well as all of the approvals necessary to start construction.
The equity investors
The Caisse de dàƒ©pàƒ´t et placement du Quàƒ©bec is a financial institution that manages funds for its 19 depositors which are public and private pension and insurance funds. Through certain subsidiaries, the Caisse offers private investment funds and real estate management services to external institutional investors. The leading institutional fund manager in Canada with $140 billion of assets under management as at December 31, 2003, the Caisse invests in the main financial markets as well as in private equity and real estate.
For more information: www.cdpcapital.com.
SNC-Lavalin Generation Inc. (TSX: SNC) is a wholly owned affiliate of the SNC-Lavalin Group Inc., one of the world’s leading groups of engineering and construction companies, a global leader in the ownership and management of infrastructure, and a key player in facilities and operations management. The SNC-Lavalin companies have offices in more than 30 countries and are currently working in some 100 countries. (see www.snclavalin.com.)
Energy Investors Funds Group, founded in 1987, has mobilized over $1 billion in capital, and currently manages five private equity funds from its offices in Boston, New York, and San Francisco. The US Power Fund, L.P., which closed in December 2003 and raised total commitments of $250 million, principally targets investments in generation, transmission and energy service assets in the U.S. For more information visit www.eifgroup.com.
Project development team
SCS Energy LLC has been the lead developer of the Astoria Energy project since its inception in 1999. SCS is a privately owned energy development company, with its headquarters in Concord, Massachusetts. Astoria Energy is SCS’s third successful project; SCS has helped develop the 750 MW Marcus Hook Project in Philadelphia and the 500 MW Newington Energy Project in Newington, New Hampshire.
AE Investor LLC, is a special-purpose company formed to invest in the Astoria Energy project.
The Astoria Energy development team has a combined 160 years of experience in the independent power sector, representing every relevant discipline necessary for the development, construction and operation of power projects, including permitting, finance, construction management, fuels management and operations.
Stone & Webster to construct the plant
Astoria Energy selected Stone & Webster, Inc. as the Project’s Engineering, Procurement and Construction contractor. A subsidiary of The Shaw Group, Inc. (NYSE: SGR), Stone & Webster is a full service engineering and construction company with over 100 years of experience, including the construction of power projects totaling 200,000 MWs. In New York City, Stone & Webster recently completed construction of the Ravenswood plant expansion.
One of the leading operations and maintenance providers in the world, North American Energy Services will perform the operations and maintenance (O&M) functions for Astoria Energy.