Utility user cogeneration venture planned to avoid rate hike

Gulf States Utilities is planning a joint venture with three manufacturing plants in which the utility will convert two 100-MW gas-fired generators to a petroleum coke-fired cogeneration plant that will provide electricity and steam to the firms. The plants will avoid most or all of a rate increase. Although it is only in the feasibility study stage now, the project could be in operation by the end of the year. The utility must own less than half of project in order to avoid regulatory obstacles, so its contribution will be the existing plant and the industrial partners will contribute the fluidized bed boilers. The utility will retain business, while the partners will save investment capital.