CPS Energy Buys 800 MW Power Plant in Seguin

By Camelia Bulea, Associate Editor

San Antonio-owned CPS Energy agreed to buy the Rio Nogales natural gas plant in Seguin, an 800-megawatt combined-cycle plant that has been in operation for the past 10 years. A CPS news release reports that purchasing the plant will save the company a minimum of $1 billion in costs that would have been required to continue operating its coal plant J.T. Deely.

CPS, one of the nation’s first energy producers to shift from coal to natural gas, is striving to invest in plants that don’t emit particulate matter or sulfur dioxide but support abundant natural gas resources, which is a cleaner fuel than coal. Among the greatest advantages of the natural gas combined-cycle plant:

• It uses approximately one-half the water;
• It emits approximately one-half the carbon dioxide;
• It emits approximately one-third of the ozone-forming nitrogen oxide emissions.

The plant is expected to be operational for the next 30 to 40 years, according to the Seguin Gazette. Rio Nogales is currently owned by a Tenaska Capital Management L.L.C. affiliate. The publication quoted Seguin’s assistant city manager, Rick Cortes, as saying the deal will result in some lost tax revenue for the local area, but he noted that the city is working on a settlement with CPS.

According to the San Antonio Business Journal, the plant purchase should be finalized in early April. CPS Energy expects to retain all 30 current employees.

Earlier this year, CPS Energy agreed to purchase 400 megawatts of solar power from OCI Solar Power over the next 25 years, making it one of the largest solar-power development projects in the country. San Antonio-based CPS Energy is the nation’s largest municipally owned natural gas and electric utility.