PF Archive

Elwood Energy: peaker-boo

01 11 2001

Elwood Energy, a joint venture of Dominion Energy and People's Energy, has completed a $402 million bond financing in what is billed as one of the first bond financings of a peaker plant. Lenders view peaker plants, which come on- and off-line at short notice to capture value from spikes in wholesale electricity prices, as a very risky proposition. This deal, which mixes up a solid contractual element with an unprecedented series of enhancements, could well be a template deal for the 6500MW of peaking capacity that is currently planned for the United States. Elwood is a 1049MW plant located 50 miles from the lucrative load pocket of Chicago, Illinois. It consists of nine simple-cycle GE 7FA turbines installed in two phases: the first four units were in place in 1999, and the next five were in place in July 2001. The construction was carried out by GE Power Systems, and work was funded on the parents' balance sheets. The sponsors, however, have put in place a number of power purchase agreements with...