(MGD) from the nearby Ouachita River through an agreement with a local water agency,
which has rights to 65 MGD. To satisfy the project’s needs and to provide a new source of
water supply to the local industrial community, a five-mile, 48-inch pipeline has been con-
structed between the power plant and the river.
Water for the Gila River project is drawn from an on-site aquifer through seven 700–900-
feet-deep water wells. A hydrological study concluded that the aquifer could meet the pro-
ject’s water needs, estimated at 11 MGD, during its lifetime. This will provide the project
with an advantage over other proposed projects in the region that face significant hurdles in
securing sufficient water supplies.
Electrical transmission capability
The Union Power project is connected to Entergy Corporation’s 500 kV El Dorado transmis-
sion substation located adjacent to the plant site, thereby gaining direct transmission access
to the Entergy subregion of the SERC, which is connected to the Southwest Power Pool, part
of the NERC, and to the TVA and Southern Company subregional markets. In addition, the
sponsors have invested in several additional upgrades recommended by Entergy to enhance
the power plant’s transmission capability.
The Gila River project output is delivered to the existing Palo Verde–Kyrene transmis-
sion line via two new 19-mile 500 kV transmission lines. It is also interconnected to the
existing Arizona Public Service Company 230 kV Gila Bend–Liberty transmission line,
which is located adjacent to the plant site. These transmission facilities provide the project
with direct access to four investor-owned utilities, the metropolitan market of Phoenix,
Arizona, and the Palo Verde hub, which serves significant portions of the Southern
California market.
Energy management plan
The Partnership has a comprehensive energy management plan for fuel purchase, power sales
and risk management that uses the experience and business contacts of qualified third parties,
while retaining oversight and ultimate responsibility in the hands of the sponsors.
Responsibilities and major roles in the energy management plan are illustrated in Exhibit 13.2.
TPS planned to manage long-term transactions and divide the coordination of short-term
transactions among three parties:
- Aquila as the Power Manager;
- Noble as the Fuel Manager; and
- TPS itself as the Energy Coordinator.
At the time of the project financing Aquila was one of the top five combined gas and power
marketers in the United States. Its wholesale energy marketing business consisted of gas and
power marketing, and a supply and transport network comprised relationships with gas pro-
ducers, local distribution companies and end-users throughout the United States and Canada.
Obligations of Aquila were guaranteed by its parent, UtiliCorp United, which was rated
‘BBB’ by Standard & Poor’s, and ‘Baa3’ by Moody’s.
Noble, a subsidiary of NAI, an independent exploration and development company with
POWER PLANT