Building the future

The Masspower project in Springfield, Mass., was built by a joint venture partnership of five separate companies. Independence Station in Oswego, NY., is a 1,000 MW facility that will wheel power 250 miles to Consolidated Edison's grid. The 1,500 MW Summit Pumped Storage Project in Norton, Ohio, is expected to be an exempt wholesale generator that will be leased by its owners to a group of utilities led by Ohio Edison. These are examples of the foundation-level changes the power industry is undergoing. Current trends such as globalization, consolidation, vertical disintegration and privatization reflect fundamental changes in the system by which electric power capacity is built, operated, distributed and managed. At the nexus of this change is an international shift toward competition in power markets. In the United States, new energy legislation is poised to enable a diverse group of players to bring new power capacity on line. Internationally, privatization and competitive market measures are opening up scores of countries to participation by private power development companies. One recent example is India, where the government is rewriting the rules to encourage private investment. The topics of this article include financing new projects, fuel issues, permitting and siting, the vendor/client relationship, project scenarios, incentive ratemaking, global markets, increased competition and responding to the marketplace. The article also includes a sidebar illustrating the types of financing, ownership and operations structures likely to be seen in future projects