PSEG Power’s wholly-owned subsidiary PSEG Fossil, which operates the company’s portfolio of natural gas, coal and oil-fired electric generating units, will acquire the Keys Energy Centre, a 755 megawatt (MW) natural gas-fired combined-cycle power plant project, from Genesis Power and Ares Management, the project’s developer and equity investor, respectively.
PSEG Power, a subsidiary of Public Service Enterprise Group (PSE&G), a New York-listed energy company, expects construction to begin this year and the plant to be operational in 2018.
PSEG Fossil, which will oversee construction, will then operate and maintain the plant, said the company in a statement. SNC-Lavalin is the engineering, procurement and construction contractor for the project.
“The new plant offers a strong operational and financial fit for PSEG Power’s balanced generation portfolio and will expand our footprint in our core PJM market,” PSEG Power president and chief operating officer Bill Levis said, referring to the Pennsylvania-New Jersey-Maryland wholesale electricity market.
According to the statement, the project was bid into and cleared the PJM capacity auction in May 2014.
Located in Brandywine, Maryland, the plant represents an investment of $825 million to $875 million, PSEG Power said. Renamed PSEG Keys Energy Centre, it will connect to the Potomac Electric Power Company (PEPCO)/PJM 500-kilovolt transmission line, located next to the plant, while natural gas will be easily supplied from an interstate pipeline that is within close proximity.
Genesis Power, which develops, builds, owns and operates independent power generating facilities, asked for permission to build the plant in July 2012, when it filed for a Certificate of Public Convenience and Necessity (CPCN) with the Maryland Public Service Commission.
According to the Keys Energy Centre project website, Genesis Power gave private equity firm Energy Investors Funds (EIF), through its EIF United States Power Fund IV, the option to provide all of the equity necessary to build the power plant. The fund is now managed by the EIF Group at Ares Management, the Los Angeles-based asset manager that acquired EIF last November.