Southern Energy announces plans for new Bay Area electricity generation

SAN FRANCISCO – Southern Energy Inc., a unit of Southern Company, today announced plans to add new electricity generation in the greater Bay Area to improve reliability through the use of advanced technology.

“Southern Energy is very enthusiastic about our plans in the Bay Area,” said Randy Harrison, chief executive officer of Southern Energy California. “Through the addition of this new power generation capability, we will be able to help meet the increasing energy needs of the greater Bay Area and greatly enhance the region’s energy reliability.”

Southern Energy plans to install state-of-the-art natural gas-fired turbines at its Potrero and Antioch power plants. The turbines make electricity by burning natural gas. Heat from the turbines is then recycled to boil water, powering a steam turbine that makes additional electricity.

The process, known as “combined-cycle gas turbine generation,” is the most efficient and environmentally sound way to make electricity on a commercial scale, and the generators also will be equipped with advanced emission controls. The new generation at both plants will cost between $400 million and $600 million and will require two years to build.

Southern Energy purchased the Potrero and Contra Costa plants, along with a third power station in Pittsburg, from Pacific Gas & Electric in April.

Despite the increase in electricity capacity, overall emissions from the Potrero Power Plant actually should be lower on an annual basis than the plant’s current emissions once the construction is complete, Harrison said. The reduction will result from the new, more efficient generation running more than the existing generation, which will be equipped with additional environmental controls.

San Francisco currently receives its electricity from three sources: Potrero, Hunters Point power plant (owned and operated by Pacific Gas & Electric), and transmission lines that bring in power from plants outside the area. The new generation also will allow for the implementation of plans to shut down Hunters Point.

The new unit to be located at the Potrero facility will have the capacity to produce 520 megawatts of power, bringing Potrero’s total generating capacity to 880 megawatts.

The Contra Costa Power Plant in Antioch is essential to the reliability of the greater Bay Area’s electric system. With increasing demand in the area, the addition of new generation will ensure the availability of efficient and environmentally sound power. The facilities proposed for Contra Costa will generate 530 megawatts of electricity, bringing the combined total there to 1,210 megawatts.

Southern Energy Inc., a unit of Southern Company, develops, builds, owns and operates power production and delivery facilities and provides a broad range of services to utilities and industrial companies around the world. Southern Energy, through its subsidiaries, supplies electricity in 10 countries on four continents. Its Southern Company Energy Marketing subsidiary, jointly owned with Vastar Resources Inc., provides energy trading, marketing and financial services and other energy-related commodities, products and services to customers in North America.

Southern Company (NYSE: SO), the largest producer of electricity in the United States, is also the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric.