Panda Energy, TECO Power Services break ground on nation’s largest independent power plant

EL DORADO, Ark., Aug. 21, 2001 – Panda Energy International and TECO Power Services officially broke ground today on their joint venture’s Union Power Station.

The 2,200-megawatt, natural gas-fueled electric power plant located in El Dorado, Arkansas will provide enough energy to power more than two million homes.

Construction costs of the Union facility are estimated at approximately $1.1 billion. The TPS/Panda joint venture recently completed a $2.2-billion bank financing to construct the El Dorado project, along with a similar plant located in Gila Bend, Arizona. The two plants represent almost 4,400 megawatts of generation and are the largest independent power projects in the United States. The financing transaction has been described as the most successful large-scale merchant financing this year.

Panda Energy Chairman and CEO Bob Carter said, “This is a great day for our partnership and Panda. We are very excited to be part of El Dorado and Arkansas. This plant represents a new benchmark for the power industry. We are proud to be able to bring 2,200 megawatts of new, highly efficient, environmentally friendly natural gas-fueled electricity to the American people.”

The Union Power Station is being constructed to serve wholesale customers throughout the states of Arkansas and Louisiana as well as portions of Mississippi and Texas. In addition, the plant is designed to sell into the surrounding states of Oklahoma, Missouri and Illinois. During peak construction, more than 1,000 construction workers are expected to be employed with a payroll of approximately $8.5 million.

The first phase of the facility is expected to begin commercial operation in the summer of 2002, with commercial operation of the rest of the facility slated for the following summer. Once the plant is fully operational, it is expected to have 65 employees with an annual payroll of approximately $3.25 million. The Union Power Station is also expected to have local economic impact of between $5 and $8 million each year in purchases of goods and services.

The El Dorado project is also an example of business, government and local citizens coming together to help accomplish a major community project. The Sparta aquifer, the county’s source of water, is dangerously low and needs a chance to recover from decades of overuse. To give the aquifer a chance to rebound, the Union County Water Conservation Board is joining forces with the TPS/Panda joint venture.

The water intake and pipeline being built from the Ouachita River to meet the power plant’s water needs is being extended to three of the county’s largest businesses. Combined with conservation measures, the pipeline will reduce the county’s use of the Sparta by an estimated 60 percent, and allow the aquifer to refill and catch up with demand. The pipeline is scheduled for completion in 2003.

In January 2001 the TPS/Panda joint venture announced that NEPCO would be the EPC contractor for the El Dorado and Gila Bend projects. EPC contractors oversee the engineering, construction and management of all facets of the project through commercial operation. It is believed that together these are the largest EPC contracts ever signed for independent power plants. Once the plants begin commercial operation, Aquila, Inc. will market excess energy.

Headquartered in Dallas, Texas, Panda Energy International, Inc. is a privately held, non-regulated electric generation company whose primary focus is the development, ownership and operation of state-of-the-art, environmentally clean, low-cost power plants. The company has plants in Roanoke Rapids, North Carolina; Brandywine, Maryland, and it has an ownership in three 1,000-megawatt plants it developed in Guadalupe County, Paris and Odessa, Texas. Panda also has plants in China and Nepal and is the developer and a partner in three merchant plants presently being constructed in the United States. Panda has developed 9,000 megawatts that are either under construction or in commercial operation. Panda also has 10,000 megawatts of electric generating capacity currently in advanced development and an additional 6,500 megawatts in the early stages of development.

TECO Power Services Corporation is a wholly owned subsidiary of TECO Energy, Inc., a diversified, energy-related holding company headquartered in Tampa. Other TECO Energy businesses include Tampa Electric, Peoples Gas System, TECO Transport, TECO Coal, TECO Coalbed Methane, TECO Propane Ventures and TECO Solutions. TPS builds, owns and operates electric generation facilities with emphasis on high growth areas of North America. Domestically, announced projects call for TPS to serve customers in 18 states, spanning the southern half of the United States. TECO Energy as a whole has net ownership interests in nearly 11,000 megawatts of generating capacity, either operating, in construction, or in advanced stages of development worldwide.

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