Irvine-based independent power producer Newport Generation Inc. is building a power plant in eastern Washington that won’t be able to help California this summer but could play a part in the state’s long-term power fix.
The 1,000-megawatt plant, capable of producing power for 1 million homes, isn’t set to come on line until 2004. Once the plant in Wallula, Wash., is up, Newport Generation expects to sell power to electric utilities as well as power providers such as Houston-based Enron Corp.
Chuck Brown, Newport’s founder and chief executive, says it’s hard to tell where power from the plant will end up. But California typically turns to plants in the mild Pacific Northwest to meet peak summer demand. Trouble is, this year hydroelectric plants in the region may not be up to par because of low snow and rainfall.
Newport has been in business for about a year. Brown himself left a post as president of New Orleans-based Entergy Power Group to form the upstart power producer. Newport is funded by a $150 million investment from New York-based Warburg Pincus as well as $10 million from its executives, Brown said.
Newport already has started building four natural gas-fired power plants in various parts of the country, heading up project management as well as ownership and operation of the plants. The company relies on contractors to get things up and running.
The company has set its sights on large power plants. Projects under way include the 865-megawatt Thunderbird project in Oklahoma, the 1,300-megawatt Kootenai plant in Idaho and the 1,600-megawatt Palestine plant in Anderson County, Texas, in between Dallas and Houston.
The company’s goal is total plant capacity of 6,000 megawatts within five years, according to Brown.
“We like to focus on bigger projects to get more value and energy output per acre,” he said.
The company plans to move to bigger offices in a few weeks, relocating operations from its current 3,500-square-foot space to new digs spanning 11,500 square feet at Bayview Circle in Newport Beach. The company counts 13 employees in OC.
“Being here in Orange County gives us close access to what we think is an outstanding market,” Brown said.
Newport also has an office in Charlottesville, Va., which focuses on projects in the Southeast and Midwest, Brown said.
California’s power crisis has provided a logical impetus to stay here, Brown said. But the state’s electricity supply market has a negative flip side, he said.
“There is concern in the industry that if you’re not already in the queue for plant approval, by the time you get a plant built here there will already be too much supply capacity,” Brown said. “That’s the counter-intuitive reason we’re not doing any California-based projects.” Newport isn’t in the running for anything in state as of yet, though about 30 projects have been announced for California to date, according to Brown.
At Entergy, a power wholesaler and utility operator, Brown headed the development and acquisition of plants in the U.S. as well as in Europe.
So far, Newport doesn’t count any revenue,that won’t happen until its projects begin churning out electricity, Brown said.
Newport’s competitors include Irvine-based Edison Mission Energy Co., a unit of Edison International, San Jose-based Calpine Corp., and Arlington, Va.-based AES Corp., which owns and operates the AES Huntington Beach Generating Station. n
