April 29, 2008
By Wayne Barber
SNL

Southwestern Power Group II expects to start construction soon on its long-planned Bowie power plant project in Cochise County, Ariz.

"Technically, construction has begun," spokesman Ian Calkins said April 28, specifying preliminary site preparation and access road work that is already under way. The company is working to obtain a permit from the county to begin clearing the land, Calkins said.

The project already holds a certificate of environmental compatibility from the Arizona Corporation Commission.

Southwestern first received a state permit a few years ago for a 1,000-MW, gas-fired power plant. Then the company tried to sell residents and regulators on the idea of locating a 600-MW coal gasification power plant on the Bowie site.

In summer 2007, Southwestern said it was reverting back to its original gas-fired power project, in part because of difficulty in siting the Bowie IGCC.

Construction should begin this year on the first 500-MW phase of the gas-fired power plant, Calkins said. That unit should be ready for commercial operation in 2010. Construction of the second phase of the project is yet to be determined, and will be influenced by market factors.

Southwestern Power has customers lined up for the output of the first phase of the project, but it is not naming them at this time, Calkins said. Likewise, the company has elected not to disclose the estimated cost of construction.

The site, about 80 miles east of Tucson, Ariz., will tie into the regional power grid via the transmission system of UniSource Energy Corp. subsidiary Tucson Electric Power Co., Calkins said.

Southwestern does not foresee any problems securing customers for the output of a second unit. "Here in Arizona alone, demand is growing by about a power plant a year," Calkins said.

The plant will be two miles north of Interstate 10 and the community of Bowie, Ariz. The project site and surrounding area are primarily agricultural. The area was chosen because of its remote location, proximity to existing natural gas lines and transmission infrastructure, rail and freeway access, available land and adequate water supplies.

In Cochise County alone, there will be 500 to 600 construction jobs. When the plant is operational, it will employ 20 to 40 full-time workers representing a permanent payroll projected to be $1 million to $2 million annually, the company said on its Web site.

Southwestern Power Group is a Phoenix-based company that develops and, through affiliates, constructs, owns and operates gas-fired power plants throughout the United States. Calkins said the company still believes in coal gasification technology, but does not believe it can move forward with an IGCC in the current regulatory and market climate.